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Take-Two Interactive (TTWO) will reduce its workforce by approximately 5 percent & cancel projects

The downsize is estimated to cost $160 to $200 million and is expected to achieve an annual cost saving of over $165 million.
Sam Chandler
Sam Chandler
Take-Two Interactive
2

The layoffs and project cancelations continue with Take-Two Interactive (TTWO) the latest company that will be downsizing. Despite hitting $1.37 billion in revenue and spending $460 million to acquire Gearbox Entertainment, the parent company of Rockstar Games will be laying off 5 percent of its employees.

On April 16, 2024, Take-Two Interactive released its Form 8-K that it had filed with the United States Security and Exchange Commission. This form outlines the plans the company has in regards to downsizing in order to achieve an annual cost saving of $165 million. In order to do this, Take-Two Interactive will be reducing its taskforce by 5 percent.

Image from the Form 8-K that reads: Item 2.05 Costs Associated with Exit or Disposal Activities On April 16, 2024 the Board of Directors of Take-Two Interactive Software, Inc. (the “Company”) approved a cost reduction program (the “Plan”) to identify efficiencies across its business and enhance the Company’s margin profile, while still investing for growth. 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 Company estimates that it will incur approximately $160 million to $200 million in total charges in connection with the Plan. The Company expects $40 million to $60 million of the total charges to result in future cash expenditures. The total charge consists of approximately $120 million to $140 million related to title cancellations, approximately $25 million to $35 million associated with employee severance and employee-related costs, and approximately $15 million to $25 million related to office space reductions. The Plan is expected to be largely complete by December 31, 2024 and will reduce the Company’s workforce by approximately 5%. Item 7.01 Regulation FD Disclosure The Company expects to achieve over $165 million of annual cost savings in connection with the Plan disclosed in Item 2.05 of this Current Report on Form 8-K, which includes reductions to its existing expense base and lowered projected expense growth for the coming years.

Source: Take-Two Interactive Form 8-K

Terminating the employment of 5 percent of its workforce will cost Take-Two somewhere between $160 and $200 million dollars. The company notes that of this sum, between $25 and $35 million will be for employee severance and employee-related costs while $120 to $140 million is related to title cancelations. Finally, $15 to $25 million is the estimated cost of office space reductions.

Recently, Take-Two Interactive released its Q3 2024 earnings results, which saw it beat revenue and EPS expectations. The company posted $1.37 billion in revenue, beating out the Wall Street analysts’ estimates of $1.3 billion. The company also recently acquired Gearbox Entertainment Company for $460 million, which secures Take-Two the Borderlands franchise along with the publishing arm of Gearbox.

In addition to this, Take-Two Interactive also revealed Grant Theft Auto 6, the sequel to the critically acclaimed and commercial success, Grant Theft Auto 5. Despite beating revenue estimates, acquiring another large company, and the announcement of one of the most eagerly anticipated video games, it seems that it’s not quite enough to secure the jobs of 5 percent of its workforce.

Head of Guides
Head of Guides

Hailing from the land down under, Sam Chandler brings a bit of the southern hemisphere flair to his work. After bouncing round a few universities, securing a bachelor degree, and entering the video game industry, he's found his new family here at Shacknews as Head of Guides. There's nothing he loves more than crafting a guide that will help someone. If you need help with a guide, or notice something not quite right, you can message him on X: @SamuelChandler 

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