GameStop is laying off Chief Financial Officer Mike Recupero and an unknown number of additional employees. According to an e-mail sent out to all staff reviewed by Kotaku, the layoffs are primarily focused in its Grapevine, Texas offices, but also extend to media outlet Game Informer’s operations up in Minneapolis, Minnesota.
In said e-mail, CEO Matt Furlong said that the layoffs are part of a bid for “sustained profitability.” “This means elimination [sic] excess costs and operating with an intense owner’s mentality,” he wrote. “Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results.”
Furlong and Recupero both joined the company in 2021. Recupero will be replaced by chief accounting officer Diana Jajeh.
GameStop’s quest for profitability will need to reckon with the fact that the company is losing more money than ever. In the first quarter of fiscal year 2022, GameStop posted a loss of $158 million, over double the amount of money it lost in the same quarter in 2021.
GameStop’s history of financial turbulence
The words “GameStop” and “layoffs” have unfortunately become closely intertwined in the last three years. In 2019, the company laid off hundreds of employees, closed stores, and it slashed jobs at Game Informer in early 2020.
Then came the COVID-19 pandemic, and shortly after that, the Gamestock meme stock surge. The Gamestop stock bubble does not appear to have meaningfully boosted the company’s profits, and the company has pinned its hopes on a blockchain marketplace for cryptocurrencies and NFTs.
(Said marketplace launched right as the broader cryptocurrency market has taken a huge dive).
The success of GameStop’s blockchain marketplace should be weighed against the other ways it’s attempted to expand the business over the years. It’s previously attempted to pivot to a collectibles business, tabletop games, and even game publishing. All of these efforts failed to transform how the company operates.
How will these layoffs impact GameStop’s financial future? It’s hard to tell. A four-for-one stock split issued by the company this week has boosted its shares, though its stock price dropped 10 percent in after-hours trading.