Take-Two Interactive Software, the publisher of the “Grand Theft Auto” franchise, has announced plans to lay off approximately 600 employees, which represents about 5% of its workforce. This decision comes as the video gaming industry continues to experience ongoing job cuts, spanning more than two years. In addition to the layoffs, Take-Two will also discontinue several projects currently in development as part of a cost-reduction strategy that is anticipated to incur charges of up to $200 million. The company has not disclosed the specific projects that will be canceled but expects to achieve over $165 million in annual cost savings as a result of these changes.
Despite the looming layoffs and project cancellations, Take-Two’s shares experienced a 1% increase in extended trading. This positive market response comes after a year in which the company’s shares have fallen by nearly 10%. This workforce reduction aligns Take-Two with other industry players like Tencent-owned Riot Games, Electronic Arts, and Sony in addressing uncertain consumer spending following the pandemic-era gaming boom. While the industry has seen significant growth during this time, trends suggest that PC and console gaming revenue growth may stay below pre-pandemic levels until 2026 due to decreased playtime among gamers.
The cancellation of projects within Take-Two is expected to result in charges of up to $140 million, with additional costs of approximately $35 million related to severance and employee-related expenses. The company will also be restructuring office space as part of these changes. Take-Two currently employs around 11,580 full-time workers as of March 2023 and recently revealed plans to acquire Gearbox, the studio behind the popular “Borderlands” franchise, for $460 million. This acquisition takes place amid a broader industry trend towards consolidation that has driven up prices for developers of well-known titles.
Despite the cost-cutting measures and organizational changes, Take-Two remains focused on developing the next iteration of the widely successful “Grand Theft Auto” franchise. However, reports have suggested that the release of this highly-anticipated title could be delayed from 2025 to 2026. These developments in the gaming industry highlight the complex challenges faced by companies as they navigate market fluctuations, consumer trends, and internal restructuring efforts. Take-Two’s decision to reduce its workforce and scrap projects underscores a broader industry shift towards adapting to changing market conditions to sustain long-term growth and profitability. As the gaming landscape continues to evolve, companies like Take-Two will need to remain agile and proactive in their strategies to stay competitive and meet the demands of an increasingly dynamic market.
