Take-Two Interactive Announces Significant Workforce Reductions and Project Cancellations
Summary
– Take-Two Interactive will lay off 5% of its workforce, impacting around 550 employees.
– The company is canceling in-development projects worth $140 million.
– Total restructuring costs are estimated between $160 million to $200 million, with significant portions allocated to severance and title cancellations.
In a surprising turn of events, Take-Two Interactive, the publisher behind the highly anticipated Grand Theft Auto VI, has announced significant cuts as part of a major restructuring plan detailed in a recent SEC filing. This decision involves laying off 5% of its approximately 11,000 employees and canceling several projects that were in development, which is cumulatively valued at $140 million.
The restructuring comes unexpectedly, especially considering that CEO Strauss Zelnick reassured employees about job security less than a month ago following a March investor call discussing cost reductions. The company now faces estimated charges for this restructuring plan ranging from $160 million to $200 million. This includes $120 million to $140 million from canceled titles, $25 million to $35 million in employee severance, and $15 million to $25 million from reductions in office space.
Despite these cuts, Take-Two is preparing for a significant boost in sales with the upcoming release of GTA VI, slated for 2025. Additionally, the company has other major projects in the pipeline, including new entries in the BioShock and Mafia series and an intriguing title from Ken Levine’s Ghost Story Games called Judas, described as “BioShock in space.”
This restructuring coincides with Take-Two’s plan to acquire Gearbox Entertainment, known for the Borderlands series, for $460 million, indicating a strategic realignment focusing on core projects and long-term corporate sustainability.
