The company disclosed on Tuesday that it will also discontinue several projects currently in development as part of a cost-reduction initiative, anticipating total charges of up to $200 million. However, it refrained from disclosing the specific projects affected by the cancellations.
Take-Two anticipates that these measures will yield more than $165 million in annual cost savings. Despite the announcement of the workforce reduction, the company’s shares saw a 1% increase in extended trading. Nonetheless, they have experienced a nearly 10% decline since the beginning of the year.
This decision places Take-Two in line with other industry players, including Tencent-owned Riot Games, Electronic Arts, and Sony Corp of Japan, which have also undergone staff reductions this year due to uncertain consumer spending following the pandemic-induced surge.
The revenue growth in PC and console gaming is predicted to remain below pre-pandemic levels until 2026. The stagnations is attributed to decreased gaming hours among players. Canceled projects are projected to contribute up to $140 million to the total charges, while severance and employee-related expenses are estimated to be as high as $35 million. Additionally, Take-Two will downsize some office spaces as part of the restructuring.
With approximately 11,580 full-time employees as of March 2023, Take-Two recently announced its acquisition of “Borderlands” creator Gearbox for $460 million, a move aimed at capitalizing on industry consolidation trends.
While Take-Two has been concentrating on developing the next installment in the highly successful “Grand Theft Auto” franchise, reports suggest that the release date might be postponed from 2025 to 2026.
