Grand Theft Auto Maker Take-Two Interactive To Slash 5% Workforce - What's Going On?
Portfolio Pulse from Nabaparna Bhattacharya
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) announced a workforce reduction of 5% as part of a cost reduction program, aiming to enhance its margin profile while still investing for growth. The company expects to incur $160 million to $200 million in total charges related to this plan, which includes costs for title cancellations, employee severance, and office space reductions. The plan is expected to be complete by December 31. Grand Theft Auto VI, anticipated for release in 2025, is expected to be one of the highest-grossing media products. TTWO stock has gained over 16% in the past year and is trading higher by 0.39% to $146.00 premarket.
April 17, 2024 | 10:10 am
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NEUTRAL IMPACT
VanEck Video Gaming And ESports ETF (ESPO) includes Take-Two Interactive, and its performance may be influenced by TTWO's workforce reduction and cost management efforts.
Given that ESPO includes TTWO, the ETF could see some impact from the workforce reduction news. The effect might be limited due to the ETF's diversified holdings.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Roundhill Video Games ETF (NERD) includes Take-Two Interactive in its portfolio, potentially impacting its performance due to TTWO's recent workforce reduction announcement.
As NERD holds TTWO in its portfolio, the ETF might experience some volatility due to the news. However, the diversified nature of ETFs could mitigate the impact.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Take-Two Interactive plans to reduce its workforce by 5% as part of a cost reduction strategy, incurring significant charges but aiming for long-term growth with the release of Grand Theft Auto VI.
While the workforce reduction and associated charges might concern investors in the short term, the anticipation of Grand Theft Auto VI and the company's focus on long-term growth could stabilize or potentially uplift the stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100