In a move aimed at reducing expenses and streamlining operations, Take-Two Interactive, the publisher behind hit franchises like Grand Theft Auto (GTA) and Red Dead Redemption, has announced layoffs affecting 5% of its workforce. The company has also decided to cancel several unspecified projects.
Cost-Saving Measures
According to a recent SEC filing, Take-Two’s cost-cutting measures are expected to save the company more than $165 million annually. However, this restructuring will also incur up to $200 million in charges, with the majority (up to $140 million) related to the cancelation of projects, and another $25 million to $35 million allocated for employee severance and related costs.
The decision to downsize its workforce and trim projects comes as a surprise, given Take-Two’s CEO Strauss Zelnick’s statement in February denying any plans for layoffs. This turnaround is particularly notable, considering the company’s ownership of the highly successful GTA franchise, which has generated over $8.5 billion in revenue since the release of GTA 5 in 2013.
GTA 6 Development Concerns
While Take-Two has not specified which projects have been canceled, the elephant in the room is the potential impact on the highly anticipated GTA 6. Although it is unlikely that the sequel itself has been scrapped, the reduction in workforce could potentially delay or negatively affect its development. Recent reports have suggested that GTA 6 might be delayed from its initial 2025 release window to 2026 due to development challenges.
Industry-Wide Layoffs
Take-Two’s cost-cutting measures align with the broader trend of layoffs across the video game industry following the pandemic-fueled boom. Major players like Microsoft, EA, Sony, and Riot Games have all implemented workforce reductions in recent months.
Long-Term Growth Strategy
Despite the challenges, Take-Two remains committed to its long-term growth strategy, which includes the recent $460 million acquisition of Borderlands developer Gearbox. With GTA 6 expected to be one of the most successful games of all time, the company’s focus will undoubtedly be on ensuring its development remains on track while optimizing resources across its portfolio.
