In a tough move, gaming powerhouse Take-Two Interactive is letting go of around 600 employees, about 5% of its workforce, and axing several projects currently in the works.
This cost-saving push is part of a broader initiative within the company famous for “Grand Theft Auto.”
The decision, detailed in paperwork filed with the SEC on Tuesday, aims to wrap up most of the downsizing by the end of 2024.
Take-Two explained, “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.”
These cuts add to a string of layoffs across the gaming industry, with companies like Sony’s PlayStation, EA, Microsoft Gaming, Riot Games, and Epic Games also making reductions.
Back in February, Take-Two had hinted at a large cost-cutting strategy after facing mixed earnings results for the October-December 2023 quarter. CEO Strauss Zelnick had mentioned there were no immediate plans for layoffs.
Zelnick mentions, “Our biggest line item expense was marketing, so we do have the opportunity to optimize many expenses that don’t involve our headcount: marketing and third party expenses, vendor charges, and the like, can still be optimized.
We’re a big company, so we have always prided ourselves on being the most efficient company in the entertainment business.”
As part of its cost-cutting efforts, Take-Two anticipates incurring charges ranging from $160 to $200 million. A portion of this, about $40 to $60 million, is expected to be spent in cash in the future.
Breakdown of the estimated charges includes approximately $120 to $140 million for canceled game projects, $25 to $35 million for employee severance and associated expenses, and $15 to $25 million linked to reductions in office space, according to Take-Two.
