Take-Two Interactive Software (TTWO.O), the renowned publisher behind the immensely popular “Grand Theft Auto” franchise, has announced plans to reduce its workforce by approximately 5%, affecting around 600 employees.
This decision comes as part of a broader cost-reduction strategy that will also see the cancellation of several projects currently in development.
The video game industry has been grappling with job cuts for over two years, and Take-Two’s move aligns with similar actions taken by other major players such as Tencent-owned Riot Games, Electronic Arts (EA.O), and Japan’s Sony Corp (6758.T).
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- Take-Two Interactive will lay off 5% of the workforce (around 600 employees) as part of a cost-reduction plan.
- Several projects in development are to be canceled, resulting in charges of up to $200 million.
- The move is expected to drive more than $165 million in annual cost savings for the company.
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Take-Two Interactive, Maker of ‘Grand Theft Auto,’ to Cut 5% of Workforce and Cancel Projects
Consumers’ uncertain spending habits in the post-pandemic era have prompted these companies to reassess their workforce and project portfolios.
According to research firm Newzoo, PC and console gaming revenue growth is expected to remain below pre-pandemic levels through 2026 as gamers spend less time playing.
This shift in consumer behavior has likely influenced Take-Two’s decision to streamline its operations and focus on key projects.
The cost-reduction plan is expected to result in total charges of up to $200 million for Take-Two, with canceled projects accounting for as much as $140 million.
Severance and employee-related costs are estimated to be up to $35 million, while the company will also reduce some office space as part of the initiative.
Despite these charges, Take-Two anticipates the move will drive more than $165 million in annual cost savings.
As of March 2023, Take-Two had 11,580 full-time employees.
The company recently agreed to acquire ”Borderlands” maker Gearbox for $460 million, a deal that reflects the ongoing consolidation in the gaming industry, even as prices for well-known titles continue to rise.
Take-Two has been focusing on developing the highly anticipated next installment in the Grand Theft Auto series.
However, some reports suggest that the release of this title may be delayed from 2025 to 2026.
While the layoffs and project cancellations are undoubtedly difficult for those affected, Take-Two’s proactive approach to managing costs and refocusing its resources may help the company navigate the challenging landscape of the post-pandemic gaming industry.
As consumers’ habits evolve, game publishers must adapt to remain competitive and financially stable in the long run.
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