Take-Two Interactive is cutting the company’s staff by 5 percent in an attempt to cut costs and save money
The video game publisher, known for publishing the “Grand Theft Auto” games and the “2K” sports games, is tightening their purse strings as they attempt to find new ways to cut costs. Their current cost-reduction plan, which involved laying off 5 percent of their 11,580 full-time staff, will also include eliminating “several projects in development,” and “streamlining its organizational structure,” according to The Hollywood Reporter.
“As part of these efforts, the company is rationalizing its pipeline and eliminating several projects in development and streamlining its organizational structure, which will eliminate headcount and reduce future hiring needs,” Take-Two explained in an SEC filing stating that the board of directors approved the new program today.
This new round of layoffs comes less than a year after Take-Two laid off an unknown number of employees from its Private Division publishing label and other divisions in March 2023.
Video game publisher’s board of directors approved this plan on Tuesday, April 16.
After the plan fully takes effect, Take-Two expects to incur total charges ranging between $160 million to $200 million, with completion anticipated by Dec. 31, 2024.
Take-Two continues to remain tight-lipped about the canceled projects, though analysts estimate that project cancellations will cost $140 million. They anticipate that severance and employee-related costs will reach $35 million. Take-Two will also reduce some office space as the plan takes shape.
This is the third cost-reduction plan Take-Two has had since February 2023. The original plan sought to eliminate $50 million in annual spending, and Take-Two CEO Strauss Zelnick said at the time that “we don’t expect any kind of broad-based reduction in force.”
Earlier in 2024, Zelnick announced a more robust second cost reduction plan.
The cost-reduction plan could be enough for Take-Two to see significant gains this year. In the most recent financial quarters, Take-Two reported $1.3 billion in net bookings and expects total net bookings of $5.25 billion for its 2024 fiscal year. The next fiscal year should see the number spike as the highly anticipated “Grand Theft Auto 6” comes out. However, there is currently no release date for the video game.
This plan of action echoes a similar trend that has been happening across entertainment in the last few years. As of early February, there have been more than 16,000 layoffs in the game industry since the start of 2023. Tencent-owned Riot Games, Electronic Arts, and Japan’s Sony Corporation trimmed their workforces earlier this year as uncertainty in consumer spending after the pandemic-era boom has left profit margins slim.
Video game companies scramble for new revenue streams and cost-saving measures as Newzoo (via Reuters) predicts PC and console gaming revenue growth lagging pre-pandemic levels until 2026. Unfortunately, this necessitates laying off staff across various departments.
