Take-Two Interactive Software; the makers of “Grand Theft Auto” has announced that it will be reducing its workforce by approximately 5%, affecting around 600 employees.
As part of a cost-reduction initiative, Take-Two will also be discontinuing several projects currently in development, with anticipated charges of up to $200 million. However, specific details regarding the canceled projects were not disclosed. The company expects this plan to yield annual cost savings of over $165 million.
Following the announcement, Take-Two’s shares rose by 1% in extended trading, although they have experienced a nearly 10% decline since the beginning of the year. This move aligns Take-Two with other industry players, including Riot Games, Electronic Arts, and Sony Corp, all of which have implemented workforce reductions amid uncertain consumer spending following the pandemic-era surge.
Research firm Newzoo predicts that revenue growth in PC and console gaming will remain below pre-pandemic levels until 2026, attributed to decreased gaming hours among consumers.
Of the total charges associated with the restructuring, up to $140 million will be attributed to canceled projects, while severance and related costs are estimated to be up to $35 million. Additionally, Take-Two will reduce its office space as part of the initiative.
With approximately 11,580 full-time employees as of March 2023, Take-Two recently announced its agreement to acquire Gearbox, the developer behind “Borderlands,” for $460 million. This acquisition reflects a broader trend of consolidation in the industry, even as prices for well-known titles continue to rise.
While Take-Two has been focused on developing the next installment of the “Grand Theft Auto” franchise, reports suggest that the release of the title may be delayed to 2026 from its previously anticipated date in 2025.
