August 2, 2019
GameStop has reportedly laid off 50 mid-level employees as it grapples with changing distribution and consumer consumption of video games.
The world’s largest video game retailer, in a leaked email posted on Twitter citing ongoing companywide restructuring, said the cuts “are not easy” but necessary to enable investment in “revenue-driving” initiatives.
“Unfortunately, there are more than 50 field leaders who have been impacted and will be leaving the GameStop team,” GameStop said in the email. “This includes regional, district HR [human resources], and LP [loss prevention] leaders. These leaders will be missed and we wish them success in their future endeavors.”
New CEO George Sherman has pledged to shake up the status quo in an effort to transform the retailer, which posted a 75% drop in income in its most-recent fiscal period — driven in part by a 35% drop in console sales. Revenue fell 13.3% to $1.54 billion.
Specifically, Sherman wants to focus on the 20% of SKUs that drive 80% of our business. Notable among those performing SKUs: Collectables. The segment saw sales increase 10.5% to $157.3 million, with continued growth of trend items in both domestic and international stores.
“We’ll continue to get better at that piece of the business through inventory optimization and expand the assortment of exclusive products that our customers desire,” Sherman said on the June fiscal call.