April 18 (Punjab Khabarnama) : Grand Theft Auto publisher Take-Two Interactive (the parent company of Rockstar Games) is set to lay off approximately 5% of its workforce, around 600 employees.
This decision comes as part of a broader cost-cutting strategy that also involves cancelling several projects under development.
The announcement was made official when Take-Two filed the necessary paperwork with the Securities and Exchange Commission (SEC) on Tuesday.
The filing indicated that the downsizing process is expected to be “largely complete” by the end of the year 2024.
“As part of these efforts, the Company is rationalizing its pipeline and eliminating several projects in development and streamlining its organizational structure, which will eliminate headcount and reduce future hiring needs,” the document states.
Initially, Take-Two said they had ‘no current plans’ for layoffs
This move by Take-Two is not isolated but rather part of a larger pattern of layoffs that have been sweeping through the gaming industry. Major players such as Sony’s PlayStation, EA, Microsoft Gaming, Riot Games, and Epic Games have all announced reductions in their workforce.
Earlier in February, following a period of mixed financial results for the quarter ending in December 2023, the GTA publisher had already signalled its intention for a “significant” cost reduction plan.
Despite this, CEO Strauss Zelnick had assured that there were “no current plans for layoffs” then.
Zelnick told Variety, “Our biggest line item expense was marketing, so we do have the opportunity to optimize many expenses that don’t involve our headcount: marketing and third party expenses, vendor charges, and the like, can still be optimized.”
“We’re a big company, so we have always prided ourselves on being the most efficient company in the entertainment business.”
Take-Two’s cost-cutting measures are substantial
The company estimates that it will incur charges ranging from $160 to $200 million, with future cash expenditures expected to be between $40 to $60 million.
The breakdown of these charges includes approximately $120 to $140 million attributed to the cancellation of games, $25 to $35 million earmarked for employee severance and related costs, and $15 to $25 million associated with reductions in office space.
Despite these challenges, Take-Two has continued to invest in its portfolio
In March, the company completed the acquisition of Gearbox, the developer behind the ‘Borderlands’ series, for a sum of $460 million.
Plus, the highly anticipated ‘GTA 6’ is projected to be one of the most successful games in history.
