Brick-and-mortar video game store GameStop has announced a round of layoffs at their corporate level, which includes its Chief Financial Officer and a sizeable number of the gaming giant’s corporate staff.
In an internal memo from GameStop CEO Matt Furlong, as obtained by Axios, “a number of” employees would be laid off, including in gaming news subsidiary Game Informer, as a means to reduce costs and help the company’s goal of “sustained profitability,” as well as to encourage employees to move to an “intense owner’s mentality.”
Additionally, Furlong stated CFO Mike Recupero will be replaced by Chief Accounting Officer Diana Jajeh, as the gaming giant seeks to propel its sales growth and launch of new products.
Despite the cuts, Furlong reminded employees that they had hired over 600 employees across 2021 and the first half of 2022. Leaders were also touted as being in a better position to understand the company’s “transformation needs.” Furlong also insisted the company will make a “significant investment” regarding both potential store leaders and employees alike, which he describes as “the heart of GameStop.”
“Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results,” Furlong encouraged.
It is worth noting that GameStop’s layoffs come just a few months after the company shared its financial report for the third quarter of last year, pointing to a $105 million loss as of the 30th of October, 2021.
While Axios didn’t share the gaming giant’s full document, a purported transcript of the memo from CEO Matt Furlong was shared by an alleged employee to the r/gamestop subreddit the same day as the outlet published their article.
“Change will be a constant as we evolve our commerce business and launch new products through our blockchain group. After investing heavily in personnel, technology, inventory and supply chain infrastructure over the past 18 months, our focus is on achieving sustained profitability,” Furlong supposedly began.
He then explained, “This means eliminating excess costs and operating with an intense owner’s mentality. Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results.
“With that said, I’m getting in touch today to share three organizational updates,” Furlong would then add, before allegedly proceeding to list the aforementioned changes.
“1. After making more than 600 corporate hires in 2021 and the first half of 2022, we have a stronger understanding of our transformation needs. This has positioned us to right-size headcount across several corporate departments,” the document claims Furlong said. “Today, we’re making a number of reductions to help us keep things simple and operate nimbly with the right talent in place.”
The purported memo continues, “2. We’re going to be making a significant investment in our Store Leaders and field employees, who play a critical role fulfilling the needs of our customers. These individuals are, in many respects, the heart of GameStop. We’ll be sharing details regarding this investment in the coming weeks.”
“3. Mike Recupero, who has served as our Chief Financial Officer since last June, is departing. Diana Jajeh, who has been our Chief Accounting Officer and possesses strong institutional knowledge of the business, has been appointed Chief Financial Officer.”
“These changes will enable us to operate in a profitable manner as we execute against our strategy of pursuing sales growth in our commerce business and launching new products that empower customers within the digital asset and web3 gaming verticals. I’m confident in the team we have in place going forward, and thank you again for your continued dedication and focus,” the GameStop CEO supposedly concluded.
Later that same day, another supposed Gamestop staff member, /u/gastopme, asserted that there had been “Another round of layoffs at corporate today.”
“So far I know of ~20% people being let go,” they claimed. “Most of them recently hired (in the last 6mo-1yr). Will update with more numbers. Again, nobody let go from the NFT team.”
Reddit user Baraka_Obama chimed in, opining, “It sounds like Game Informer was hit hard, too” and pointed to at least seven Game Informer staff members who alluded to recent misfortune, fervently claiming that a couple had been let go.
The list includes Associate Editors Jason Guisao, Jill Grodt, Wesley LeBlanc, and John Carson, Video Editors Alex Van Aken and Alex Stadnik, and Online Content Director Brian Shea. With the exception of LeBlanc and Carson, all of the above names are still on Game Informer’s Staff List webpage as of this time of writing.
YouTuber Camelot331 had previously released a damning series of exposés starting in 2018 following his resignation from GameStop, after 11 years working for the company, and having risen to the ranks as a store manager.
Thanks to his experiences and whistleblowers from within the company, Camelot claimed GameStop were complicit in defrauding customers, firing staff under false pretenses when failing to meet sales goals or complaining about conditions, as well as abusing and allowing staff to be abused by customers and superiors.
He also proposed that the ultimate goal of corporate staff for the ailing retail chain was to maximize profit — by any means — and then liquidate the company. This would result in “golden parachutes” for the highest ranked staff.
However, GameStop suddenly found itself under a reversal of fortune. Reddit users of r/wallstreetsbets and other subreddits — in protest of Wall Street — decided to invest heavily into companies that were usually shorted by Hedge Funds. While a small loss at worst for the average Joe, or even profitable if lucky, it would be catastrophic for the Hedge Funds literally banking on companies like GameStop to fail.
Even that surge in stock price wasn’t enough, as per the company’s aforementioned losses. In his video, Camelot spoke his mind on the layoffs. After sarcastically noting GameStop was “losing $100 million per quarter,” the YouTuber indirectly condemned the new investors as being hoodwinked.
“Now, a lot of people that have invested in GameStop recently thinks they’re fighting for the little man. Y’know, like the people that are in charge that are billionaires- but it’s fine don’t worry about it- that is the little man apparently!” Camelot snarked.
“They think the company is being turned around,” Camelot set up. “Unfortunately Reggie Fis-Aimé, which everyone was really glad when he joined the board, he left because he claimed they wouldn’t share — and specifically Ryan Cohen [Chairman] — wouldn’t share their plan for the future on how they’re going to be a successful company.”
“If you want to see how good a company is, look at how they treat their employees,” Camelot warned, directing viewers to how users of the GameStop subreddit were “freaking the hell out.”
As Camelot read the alleged memo from Furlong, he condemned the “owner’s mentality,” as he and others had been under similar demands, yet were paid far less than what someone exhibiting the effort of an owner should earn.
He also expressed his doubt the cuts would result in investment into Store Leaders or employees, referring to Ars Technica’s report on GameStop’s NFT marketplace making $45,000 in its first day; noting this was launched the day after the layoffs.
“That is how they’re reinvesting in their employees,” Camelot insisted, along with the fact $45,000 in profit compared to other NFT schemes was “pretty damn bad.” The YouTuber’s sentiment was shared by Ars Technica’s analysis.
“The issue is GameStop’s kind of [an] old people company, it’s ran by old-a** dudes, it always has been, and their tech side has been awful. They would try to implement stuff for years and weren’t able… never able to do it,” Camelot denounced.
“It took them six months to develop their NFT like business,” he claimed, “Six months! Oh plot twist, NFT’s aren’t popular really anymore. Sooo whatcha gonna do now? This feels like a really missed opportunity.”
“I don’t know really why they jumped into this, and I’m going to tell you actually my opinion of why they jumped into the NFT market space,” Camelot prefaced.
“That is because they thought — and they probably still think — that the people that are all about meme stocks and… y’know ‘apes!’ and ‘diamond hands!’ and all that s**t…” Camelot characterized, “they thought they were gonna be able to pull one over on those people, because they think they’re naive, probably.”
After highlighting one of the NFTs being a model of a 3D cork GameStop were trying to sell for over $1.1 million — actually sold for just under $77, currently selling for over $172 — Camelot smirked, stating, “[It] sounds to me like they’re not reinvesting in their store managers or their employees and I never really expected them to.”
“Every single year at conference, in Las Vegas — they used to send us to Las Vegas and we’d party all week, it was actually pretty bada**, I’m gonna be honest — and they would always say, y’know we’d have big meetings with corporate leaders and they would say, ‘Hey, we’re gonna reinvest in you, in this Holiday,’ and they never did; in my entire 11 years there they never did,” Camelot decried.
“They said it every year, and they never did it,” he added, later claiming the Las Vegas conferences had been cancelled, much to his chagrin.
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