Grand Theft Auto maker announces 5% workforce reduction and project cancellations

Take-Two Interactive Software Inc., the renowned developer behind the Grand Theft Auto series, disclosed plans to downsize its workforce by approximately 5% and discontinue several projects. This initiative is expected to yield significant savings, with expenses estimated to reach up to $200 million.

According to a filing released on Tuesday, Take-Two anticipates substantial savings from this downsizing effort, with as much as $140 million stemming from canceled projects and $35 million attributed to employee-related costs.

The decision to implement workforce reductions aligns with broader industry trends, as major gaming companies like Unity Software Inc., Riot Games, and Microsoft Corp.’s games division have also faced workforce adjustments this year due to industry-wide contractions. Executives in the gaming sector are increasingly adopting risk-averse strategies in response to the formidable costs and lengthy development timelines associated with new game projects.

Take-Two, which employed 11,580 full-time workers at the conclusion of its last fiscal year, remains committed to optimizing its operations and resource allocation to ensure sustained growth and profitability.

Notably, despite these measures, Take-Two is anticipating significant success with the release of Grand Theft Auto VI in 2025. This highly anticipated installment in the iconic series is forecasted to become one of the highest-grossing media products of all time, underscoring Take-Two’s continued strength in developing blockbuster gaming experiences.

A spokesperson for the company declined to provide additional commentary beyond the official filing. However, in a previous earnings call in February, Take-Two acknowledged its ongoing efforts towards a “significant cost reduction program.” CEO Strauss Zelnick also addressed the issue of potential layoffs in a recent interview with IGN, indicating that while there were “no current plans” for such actions, the company remains committed to operational efficiency.

Furthermore, Take-Two’s recent acquisition of Gearbox Entertainment for $460 million highlights its strategic investments in the industry. However, the company’s purchase of mobile game company Zynga for approximately $12 billion in 2022 has encountered challenges, with industry analysts noting a downturn in the mobile games sector shortly after the acquisition. It is worth noting that the much anticipated Grand Theft Auto 6 from the company is also reportedly delayed from its original release date and is now expected to release by next year.