Major video game retailer GameStop has announced layoffs for 120 corporate staffers, representing a 14% reduction of the company’s “total associate base at our company headquarters as well as at some other offices.”
“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,” GameStop said in a statement.
“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.”
It’s unclear if that number includes staffers at GameStop-owned Game Informer magazine, many of whom took to Twittertoday to share news of their unexpected layoffs. Of the 19 staffers listed on the magazine’s masthead at least six were let go today, including Managing Editor Matt Bertz.
“I appreciate all the love,” Game Informer Editor-in-Chief Andy McNamara tweeted today. “I see it. I feel it. I am trying to get things right with my people. 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.”
Can the sinking ship be raised?
The layoffs continue a string of bleak news for GameStop, which still maintains well over 5,000 storefronts across 14 countries. After the company announced it had failed to find a buyer in January, it posted a massive quarterly loss in April, causing its stock to plummet to its lowest point since 2005. Since then, Gamestop saw its CFO and COO depart, instituted layoffs of 50 “field leaders,” and shuttered its ThinkGeek collectibles subsidiary.
As of this writing, GameStop stock is trading at $3.42. That’s down 17% from a month ago, nearly 80% from a year ago, and almost 94% from its peak in late 2013.
In June, new GameStop CEO George Sherman outlined a three-point “Reboot” plan to turn things around at the struggling retailer. Point one in that plan was addressing “selling, general, and administrative expenses,” which seems to be the target of these recent layoffs. The other two points involved “optimiz[ing] the current business,” in part through better prices on used games; and “develop[ing] new revenue streams for the future,” including more involvement digital sales and “immersive interactive experiences,” whatever that means.
Those kinds of changes might not be enough to save GameStop from the seemingly inexorable move towards downloads and Internet streams that claimed other physical media retailers like Suncoast and Tower Records. In any case, we’d imagine the GameStop belt-tightening is going to get even more drastic before any potential turnaround starts to appear.