Massive Layoffs & Project Cancellations by Take-Two Interactive

Massive Layoffs & Project Cancellations by Take-Two Interactive

Take-Two Interactive Software, known for the popular ‘Grand Theft Auto’ franchise, has announced plans to lay off about 5% of its workforce, which amounts to approximately 600 employees. This decision comes as part of a broader trend in the video gaming industry, where companies have been implementing job cuts for over two years. The company will also be halting several projects currently in development as a cost-reduction measure, anticipating total charges of up to $200 million without specifying the canceled projects.

The cost-saving strategy is forecasted to generate more than $165 million in annual savings. Despite these adjustments, Take-Two’s shares saw a 1% increase in extended trading, although they have experienced a nearly 10% decline since the beginning of this year. This move aligns Take-Two with other industry giants like Riot Games, Electronic Arts, and Sony, all of whom have downsized their workforce amidst uncertainties in consumer spending following the pandemic-era gaming surge.

The restructuring plan will also involve a reduction in office space, in addition to scrapping projects worth about $140 million and covering severance expenses of up to $35 million. The company’s decision arises amid projections that PC and console gaming revenue growth will linger below pre-pandemic levels until 2026, attributed to gamers spending less time playing. Research from Newzoo supports this forecast.

With a workforce of 11,580 full-time employees as of March 2023, Take-Two recently made headlines for acquiring Gearbox, the creator of ‘Borderlands,’ in a $460 million deal considered a bargain during a period of rising prices for renowned game developers. While Take-Two has been primarily focused on the upcoming release of the next ‘Grand Theft Auto’ game, rumors hint at possible delays that could push the launch beyond the initially anticipated 2025 to as late as 2026.

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