Take-Two Interactive Software, the company behind the famous "Grand Theft Auto" franchise, announced it will cut about 5 per cent of its workforce, equivalent to approximately 600 employees, as part of a broader industry trend of job reductions that has been ongoing for over two years. This announcement came on Tuesday, alongside news that the company will also cancel several ongoing projects as a part of its cost-reduction efforts, aiming to streamline operations and manage expenses more effectively. However, specific details on the canceled projects were not disclosed.
The layoffs and project cancellations are expected to incur total charges of up to $200 million. Breakdowns indicate that canceled projects could contribute as much as $140 million to these charges, with severance and other employee-related costs accounting for up to $35 million. The company anticipates these measures will generate over $165 million in annual cost savings.
This downturn reflects broader challenges within the gaming sector, where companies like Tencent's Riot Games, Electronic Arts, and Sony Corp have also implemented workforce reductions this year. These actions respond to the shifting economic landscape post-pandemic, which has seen a decline in consumer spending and a slower growth in PC and console gaming revenues. Research firm Newzoo projects that this slower growth will persist through 2026, continuing below pre-pandemic levels.
Moreover, Take-Two recently expanded its portfolio by acquiring Gearbox, the creator of "Borderlands," for $460 million, a transaction that underscores the ongoing consolidation in the gaming industry that is pushing up acquisition costs for popular titles. Despite the current financial and operational adjustments, Take-Two remains focused on developing the next installment of its best-selling "Grand Theft Auto" series, although there are reports suggesting a possible delay of the game's release from 2025 to 2026.