GameStop's problems continue: 120 staff laid off, stock crashing
Will it go the way of Blockbuster?By Rob Thubron 13 comments
What just happened? It appears that things are going from bad to worse for GameStop. The retail chain has just announced it is laying off 140 employees, which represents a 14 percent cut of workers at its corporate headquarters and other offices, including the Game Informer magazine subsidiary.
"As part of the previously announced GameStop Reboot initiative to transform our business for the future and improve our financial performance, we can confirm a workforce reduction was implemented," said a GameStop spokesperson.
"While these changes are difficult, they were necessary to reduce costs and better align the organization with our efforts to optimize the business to meet our future objectives and success factors. We recognize that this is a difficult day for our company and particularly for those associates impacted. We appreciate their dedication and service to GameStop and are committed to supporting them during this time of transition."
GameStop's Reboot plan, outlined by CEO George Sherman, consists of addressing selling, general and administrative expenses, optimizing the current business, and developing new revenue streams.
Seven members of Game Informer's 19 full-time staff tweeted that they have been laid off. "I am trying to get things right with my people," editor-in-chief Andy McNamara wrote on Twitter. "I love Game Informer, its people and its readers more than any corporation could, and I will address all the issues when I can, but for now I need to focus on my GI family."
Back in June 2018, GameStop began exploring options for a buyout, but it announced earlier this year that it had failed to secure a buyer. In June, it was reported that falling console sales had forced the company into cost-cutting measures, while July brought news it would be piloting new in-store concepts to try and stay afloat.
With an increasing number of gamers opting for digital downloads over buying the physical version of titles, retail stores are suffering. GameStop reported record losses for 2018, and its stock is down 17 percent compared to last month and 93 percent from its peak in 2013. With many tech giants now focusing on game streaming, the threat of these outlets going the way of Blockbuster is a very real one.