Take-Two Interactive Software the publisher behind franchises like Grand Theft Auto (GTA) and NBA 2K has unveiled a restructuring plan by laying off 5% of its workforce.
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The restructuring plan involves the layoff of approximately 5% of Take-Two Interactive’s global workforce equating to around 600 employees.
This measure is expected to generate annual savings exceeding USD 165 million. The implementation of the plan comes at a cost with total charges estimated to range between USD 160 and 200 million.
Among these charges USD 140 million is attributed to cancelled projects, while USD 35 million is allocated for severance and related employee costs.
Take-Two Interactive plans to reduce its global workforce by approximately 5 percent translating to approximately 579 jobs.
Several projects currently in development will be as part of the restructuring effort. While specific details regarding the affected projects remain undisclosed, the company’s focus on prioritizing projects like the upcoming GTA 6 installment is evident.
Take-Two Interactive anticipates incurring charges ranging from $160 million to $200 million associated with the restructuring plan.
A portion of these charges, estimated at $120 million to $140 million is attributed to the cancellation of videogame titles.
The gaming industry has seen a series of workforce reductions in recent years, with major players like Riot Games, Electronic Arts, and Sony implementing similar measures.
Industry projections indicate a slowdown in revenue growth post-pandemic. Factors such as reduced playtime among gamers contribute to a more cautious spending outlook for gaming companies.
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Take-Two Interactive’s focus on developing the next installment of the highly successful GTA franchise remains unwavering. The impending release of GTA 6 in 2025 is to be a revenue driver for the company.
CEO Strauss Zelnick reiterated the company’s commitment to growth addressing the importance of optimizing expenses without compromising on objectives.
The acquisition of Gearbox and the ongoing development of new titles exemplify Take-Two’s approach to expansion.
The company’s decision to recalibrate its operations comes with a strategy to adapt to changing market. By prioritizing efficiency and resource allocation, Take-Two plans to enhance its competitive positioning and drive sustainable growth.
With a targeted completion date set for December 31, 2024, Take-Two Interactive is to swiftly execute its restructuring plan.
Other gaming giants, including Tencent-owned Riot Games, Electronic Arts, and Sony, have also initiated workforce reductions in response to market.
The gaming industry’s revenue growth has been projected to remain below pre-pandemic levels, necessitating cost management strategies.
Take-Two Interactive’s stance aligns with industry leaders, including Apple, Microsoft, and Amazon who have also undertaken workforce reductions and restructuring initiatives.
Grand Theft Auto V, which achieved success. Reports regarding Grand Theft Auto VI, hint at a delay in the release timeline shifting from 2025 to 2026.
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