Take-Two details $50M cost reduction plan that could affect personnel

Take-Two Interactive plans to implement a cost reduction program that could include some layoffs.

After missing its net bookings target for the third quarter, the publisher said it wants to find over $50 million of annual savings by cutting costs across its entire business.

Writing in its fiscal report, the company said the cost reduction program will include personnel, processes, infrastructure, and other areas—and will primarily focus on "corporate and publishing functions."

Elaborating on those plans and the prospect of layoffs during an interview with GI.biz, Take-Two CEO Strauss Zelnick said the company isn't preparing for a "broad-based" reduction in workforce, but will be going "department by department and trying to drive efficiency."

"We continue to support and build our development teams, and where we have overhead, we have to be very diligent about looking at the overhead," added Zelnick.

Take-Two said the cost reduction program will combine with the over $100 million of cost synergies it expects to realize from its merger with Zynga, and isn't expected to impact the delivery of its "robust multi-year pipeline."

"Take-Two believes these actions, combined with its focus on profitably growing its scale, will enable the Company to maximize its margins as it delivers on its anticipated growth trajectory over the next few years," reads an investor presentation.

Although Take-Two admitted it was disappointed by its recent performance, the company said it's long-term success will be driven by its ability to "create the best entertainment experiences, including sequels of our beloved franchises and the introduction of engaging new intellectual properties."

Take-Two said it will begin to realize its cost reduction plan in the fourth quarter of the current fiscal year.