To save expenses, Take-Two Interactive announces job cuts and project halts

The company that publishes the popular “Grand Theft Auto” series, Take-Two Interactive Software, revealed on Tuesday that it will be cutting around 600 jobs, or about 5% of its staff. This action fits with the continuous pattern of job losses in the video game business, which has been going on for more than two years, according to a Reuters article.

Take-Two has also decided to cease the development of numerous other projects as part of their cost-reduction approach. The corporation expects these actions to cost up to $200 million in total. It did not, however, reveal which particular initiatives were shelved.

Take-Two hopes to save more than $165 million in costs annually by putting these adjustments into effect. In extended trading, the company’s shares increased by a meager 1% in spite of this statement. Nevertheless, since the start of the year, they have decreased by over 10%.

Take-Two’s move puts it in line with other major competitors in the market, including Riot Games, which is owned by Tencent, Electronic Arts (EA), and Sony Corp. of Japan, all of which have cut staff this year. These measures are motivated by concerns about consumer purchasing trends in the wake of the pandemic-era spike in gaming engagement.

Research company Newzoo predicts that until 2026, the increase in PC and console gaming revenue will stay below pre-pandemic levels. According to this prediction, the industry’s development is expected to slow down as a result of players playing for shorter periods of time.

Project cancellations are projected to account for as much as $140 million of the total expected penalties, with severance and personnel-related costs potentially amounting to as much as $35 million. Take-Two also intends to decrease its office space as part of the reorganization.

As of March 2023, Take-Two employed 11,580 people full-time. The business has decided to pay $460 million to buy Gearbox, the studio behind the “Borderlands” video game franchise, as a strategic move. The timing of this purchase is coincidental with the trend of industry consolidation driving up development costs for successful games.

Take-Two has been working hard on creating the next game in the hugely popular “Grand Theft Auto” series, but there have been rumors that the release date may be delayed. The game, which was initially scheduled for 2025, could instead be moved to 2026, according to certain reports.

All things considered, Take-Two’s move to lay off employees and shelve certain projects is indicative of its proactive strategy for maximizing operational effectiveness and adjusting to changing market circumstances. Companies like Take-Two are making calculated moves to stay competitive and promote long-term development as the gaming industry continues to navigate uncertainty.