Image: © miglagoa/Stock.adobe.com
The video game company that acquired Gearbox last month said the cost-cutting programme will be completed by the end of this year.
Take-Two Interactive Software, the Rockstar Games parent company that owns the Grand Theft Auto (GTA) franchise, plans to fire around 5pc of its workforce and scrap several titles currently in development.
To cut costs and get its finances in check, the video game maker revealed in an SEC filing published yesterday (16 April) that it will “streamline its organisational structure” which will slash its headcount by more than 570 jobs and “reduce future hiring needs”.
Take-Two said it wants to identify “inefficiencies” across its business and improve its margin “while still investing for growth”.
Last month, the company behind GTA 6, NBA 2K and Bioshock entered into a definitive agreement to acquire Gearbox Entertainment, creator of the popular Borderlands franchise, in a $460m all-stock deal.
The acquisition is expected to be completed during the first quarter of Take-Two’s fiscal year 2025 – which ends on 30 June 2024.
Now, the company is rationalising its pipeline and eliminating “several” unnamed projects in development which is expected to cost it approximately $160-200m in total charges. Between $40-60m of the total charges are expected to result in future cash expenditures.
“The total charge consists of approximately $120-140m related to title cancellations, approximately $25-35m associated with employee severance and employee-related costs, and approximately $15-25m related to office space reductions,” the filing reads.
Take-Two said the cost-cutting programme will be largely completed by the end of this year.
The move to acquire Gearbox last month came more than two years after Take-Two made an expensive leap into the mobile games market with its $12.7bn acquisition of Zynga.
At the time, Take-Two said the deal would make it one of the largest and most diversified mobile game publishers in the industry.
Certain statistics sites claim mobile games remain a major and growing segment of the global gaming market. A report by Statista at the end of last year claims the mobile games market was worth an estimated $140.5bn in 2022 and will surpass $173.4bn by 2026.
Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.
