GTA publisher Take-Two Interactive announces plans to reduce workforce by 5%

Job cuts in gaming industry: On Tuesday, Take-Two Interactive Software, the publisher known for its "Grand Theft Auto" series, announced plans to reduce its workforce by approximately 5 per cent, affecting around 600 employees. The decision comes amidst ongoing job cuts within the video gaming industry, extending over two years.

In addition to workforce reductions, Take-Two revealed intentions to halt several projects currently in development as part of a cost-reduction strategy, with anticipated charges amounting to as much as $200 million. The specific projects discontinued were not disclosed.

Projected annual cost savings from these measures are estimated to exceed $165 million. Following this announcement, Take-Two's shares experienced a 1 per cent increase in extended trading, though they have declined by nearly 10 per cent since the beginning of the year.

This move aligns Take-Two with other industry players like Riot Games (owned by Tencent), Electronic Arts, and Sony Corp, all of whom have also implemented workforce reductions in response to uncertain consumer spending following the pandemic-era surge.

Research firm Newzoo predicts that growth in PC and console gaming revenue will continue to lag behind pre-pandemic levels until 2026, reflecting a decrease in gamers' playtime.

The costs associated with cancelled projects are expected to reach up to $140 million, while expenses related to severance and employee-related matters could amount to $35 million. As part of the restructuring, Take-Two will also downsize some of its office space.

As of March 2023, the company employed 11,580 full-time workers. Last month, Take-Two announced its acquisition of Gearbox, the developer behind "Borderlands," for $460 million, signalling a trend of consolidation in the industry.

While Take-Two has been primarily focused on developing the next instalment of the immensely popular "Grand Theft Auto" franchise, reports suggest that its release may be delayed to 2026 from the previously anticipated 2025 timeframe.

(With Reuters inputs)