What happened now? GameStop is laying off the entire company and has fired its chief financial officer Mike Recupero as the video game retailer focuses on “digital asset and web gaming verticals.” The move came at the height of the crypto winter when the prices of digital currencies and non-fungible tokens plummeted.
An internal memo from GameStop CEO Matt Furlong leaked online. Reddit states: “Change will be permanent as we develop our commercial business and launch new products through our blockchain group.”
In the last few years, consoles have been giving way to PCs as physical games have lagged behind their digitally downloadable alternatives. Ars Technique reports that 226 new games were available on disc or cartridge last year, compared to nearly 2,200 digital games. The growing popularity of game subscription and streaming services is also impacting physical sales.
The changing landscape has brought GameStop into the world of crypto and NFTs. Earlier this yearlaunch digital wallet for both assets in May. Despite the recent drop in cryptocurrency prices, Furlong believes that GameStop is on the right track. “These changes will enable us to operate profitably as we implement our strategy to increase sales across our commercial business and launch new products that empower customers across the digital asset and web gaming verticals,” he wrote.
Furlong added that over the past 18 months, GameStop has invested heavily in personnel (more than 600 corporate employees), technology, inventory and supply chain infrastructure. “That means eliminating redundant costs and working with an intense owner mindset. Everyone in the organization needs to become even more hands-on and take on an increased level of accountability for results.”
One Reddit mail claims that about 20% of employees leave, most of which are employees hired within the last six months. He adds that no one from the NFT team has been fired.
Among the layoffs are those at Game Informer, an online magazine that GameStop acquired in 2000.
GameStop’s financial results for the previous quarter showed sales up very modestly, but net losses doubled to over $158 million.
GameStop made headlines in 2021 after its share price jumped 680% thanks to The GameStonk Phenomenon. This resulted in Redditors buying up heavily shorted shares of the company, forcing hedge funds and investors to buy back shares to mitigate their losses.
Bloomberg reports that the stock fell 5% in extended trading following the news of the layoffs.
h/t: PC gamer
Credit: www.techspot.com /