GTA maker Take-Two Interactive announces job cuts and project terminations
Take-Two Interactive Software, the renowned creator of the Grand Theft Auto game series, has announced a 5% reduction in its workforce. This decision will impact approximately 600 employees. The move reflects a broader trend in the gaming industry, which has been experiencing job cuts for the past two years. As of March 2023, Take-Two had a workforce of 11,580 full-time employees.
Cost-cutting measures at the firm
In addition to layoffs, Take-Two Interactive has decided to terminate several ongoing projects as part of its cost-cutting strategy. The company has not revealed the names of these discontinued projects. However, it expects that this move will result in charges amounting to $200 million. This strategy is anticipated to save over $165 million annually for the company.
Take-Two shares rise despite workforce reduction
Despite the announced layoffs and project terminations, Take-Two's shares experienced a 1% increase in extended trading in the US. However, the company's stocks have seen a nearly 10% drop overall this year. This trend aligns with other industry giants like Tencent's Riot Games, Electronic Arts, and Sony Corporation from Japan, who have also reduced their workforce this year, due to unpredictable consumer spending.
Gaming revenue growth expected to remain low
As per research firm Newzoo, growth in PC and console gaming revenue, is predicted to stay below pre-pandemic levels until 2026, due to gamers spending fewer hours playing. In response, firms like Take-Two are implementing measures to control expenses and concentrate on high-potential projects.
Take-Two Interactive acquires Gearbox, focuses on GTA
Recently, Take-Two Interactive agreed to acquire Borderlands creator Gearbox for $460 million in a discounted deal. The company is currently focusing on the development of the next Grand Theft Auto installment. However, there are rumors that its release could be postponed to 2026 from 2025. This acquisition and focus on high-potential projects, aligns with the company's strategy to control expenses amid industry-wide challenges.
