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'Grand Theft Auto' Maker Take-Two to Cut Staff and Cancel Projects
Take-Two Interactive Software plans to lay off around 5% of its workforce, amounting to approximately 600 employees. The company will also cancel several projects in development as part of a cost-reduction plan, resulting in charges of up to $200 million. Take-Two expects to achieve annual cost savings of over $165 million through these measures.
Take-Two Interactive Software, the publisher behind the popular "Grand Theft Auto" franchise, has announced plans to lay off approximately 5% of its workforce, amounting to around 600 employees. This move comes as the video gaming industry continues to experience job cuts that have persisted for over two years.
As part of a cost-reduction strategy, Take-Two will also be scrapping several projects that were in development. The company expects these measures to result in charges of up to $200 million, although it has not disclosed the specific projects that have been canceled.
By implementing these changes, Take-Two aims to achieve annual cost savings of over $165 million. Following the announcement, the company's shares saw a 1% increase in extended trading. However, they have experienced a decline of nearly 10% since the beginning of the year.
This decision aligns Take-Two with other industry players such as Tencent-owned Riot Games, Electronic Arts, and Sony Corp from Japan, all of whom have reduced their workforce this year due to uncertain consumer spending following the pandemic-era boom.
Research firm Newzoo predicts that the growth of PC and console gaming revenue will remain below pre-pandemic levels until 2026, as gamers spend fewer hours playing. This trend likely influenced Take-Two's decision to cancel projects and streamline operations.
The cancellation of projects is expected to account for up to $140 million of the total charges, while costs related to severance and employees are estimated to reach up to $35 million. Additionally, Take-Two will be reducing some office space as part of its cost-cutting measures.
As of March 2023, Take-Two had a total of 11,580 full-time employees. Last month, the company made headlines with its acquisition of Gearbox, the developer behind the "Borderlands" series, in a deal worth $460 million. This move came at a time when consolidation in the industry has driven up prices for well-known titles.
While Take-Two has been primarily focused on the development of the next installment in the highly successful "Grand Theft Auto" franchise, there have been reports suggesting that the release of the game may be delayed from 2025 to 2026.
Take-Two Interactive Software plans to lay off around 5% of its workforce, amounting to approximately 600 employees.
The company will also cancel several projects in development as part of a cost-reduction plan, resulting in charges of up to $200 million.
Take-Two expects to achieve annual cost savings of over $165 million through these measures.
Source: REUTERS