In 2024, 8,000 people have been laid off in the gaming industry.

Following Microsoft, Sony, and EA, another AAA game publisher Take-Two has announced a layoff plan.

Recently, Take-Two announced in a filing with the U.S. Securities and Exchange Commission (SEC) that the company plans to "evaluate the efficiency of each business line while continuing to invest in growth, thereby improving overall profit margins." As part of these efforts, the company is rationalizing its production pipeline, canceling several projects in development, and streamlining its organizational structure. This means that they need to optimize personnel and reduce future hiring needs. The company estimates that the total cost associated with the cost reduction plan is approximately $160 to $200 million.

According to Take-Two, the company hopes to complete the cost reduction plan by December 31, 2023, including a 5% reduction in workforce (approximately 579 people), canceling ongoing projects, and an estimated expenditure of $120 to $140 million to cancel projects, $25 to $35 million for employee severance, and covering other costs related to layoffs. Additionally, they will spend approximately $15 to $25 million to reduce office space.

Take-Two expects that the cost reduction plan will save the company over $160 million in funds annually.

Ironically, in February of this year, Take-Two's CEO Strauss Zelnick stated that the company's focus on cost reduction would be on reducing marketing expenses and not on layoffs. "Our organizational structure is not that bloated," he said. "I just want to point out that our biggest expense is actually marketing. I do believe that there is room for optimization in marketing. Additionally, we can find opportunities in working with third-party companies, software and service providers, and other suppliers. The most difficult thing is layoffs, and we currently have no (layoff) plans."

At the end of last year, Zelnick pointed out in a media interview that Take-Two was able to avoid large-scale layoffs because the company had established a "triple strategy" based on "innovation, creativity, and efficiency," always keeping the team at the "right scale." Last month, Take-Two announced an agreement with the Swedish game distribution group Embracer Group to acquire the developer Gearbox of the "Borderlands" series for $460 million.

In recent times, the gaming industry has frequently experienced large-scale layoffs. According to a third-party organization's statistics, the total number of employees laid off in the gaming industry since early 2024 has exceeded 8,000. Some believe that a series of factors have contributed to this phenomenon, including many gaming companies expanding too quickly during the pandemic, a slowdown in the gaming market growth, economic downturn, and soaring living costs. However, some industry insiders have put forward different ideas.

For example, at the Game Developers Choice Awards (GDCA) ceremony in March, Swen Vincke, the CEO of the Belgian studio Larian, and the director of "Baldur's Gate 3," fiercely criticized the top executives of major gaming companies for initiating large-scale layoffs. "Since I entered the industry, the greed of these executives has been destroying the entire gaming industry. I have been fighting with publishers all my life and have witnessed them making the same mistakes over and over again," he said. "In the eyes of these executives, the most important thing has always been quarterly profits, as if only numbers matter. You lay off all the employees, and then in the second year, you suddenly realize, 'Oops, we don't have enough manpower.' Then they start recruiting or acquiring teams again."

"In fact, many mistakes could have been avoided. You can reserve talent, slow down appropriately, and not be too greedy. Any company needs to have humanity, take care of its employees, and arbitrary layoffs will only cause the company to lose the valuable experience and knowledge accumulated by employees over the long term, and have to repeatedly go through the same cycle."

Michael Douse, the publishing director of Larian, also believes that many gaming companies could have avoided large-scale layoffs. "It's like a pile of messes that could have been avoided," Douse said in an interview with foreign media. "The reason we see gaming companies announcing layoffs one after another is because the executives all have the same idea: 'Well, we can finally lay off people. We've been wanting to do this for a long time, and since other companies are doing it, why can't we?' To be honest, it's really disgusting."

Amid the escalating trend of layoffs, game developers are also actively seeking solutions. Not long ago, the International Game Developers Association (IGDA) released a "manifesto," calling on the bosses of gaming companies to adjust their expectations for the industry and their enterprises reasonably to avoid unnecessary layoffs.