GameStop, the world's largest video game retailer, laid off over 120 more people in the latest sign that it's struggling to adapt to a changing market
Ben Gilbert/Business Insider
- The world's largest video game retailer is GameStop, with over 5,000 stores around the globe.
- The company is struggling to survive amidst a changing market where games are increasingly purchased digitally rather than in a retail store - an echo of the digitization struggles that record stores and movie sellers faced in the 1990s and early 2000s.
- In August, GameStop laid off just shy of 200 people across multiple divisions. The latest layoffs hit this week, and impacted nearly half of GameStop's widely-circulated publication, Game Informer.
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The world's biggest video game retailer, GameStop, is bleeding.
Look no further than the company's flagging stock price, which has been hovering in the $3 to $4 range for the past month - down from about $16 in January.
The company is in the midst of a major restructuring in an effort to stem the bleeding and turn the company around. That initiative is known as "GameStop Reboot," and this week the latest steps taken were a major layoff of over 120 employees.
It was the second such layoff in August.
Ben Gilbert/Business Insider
When reached for a statement, a GameStop representative said, "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 impacting more than 120 corporate staff positions, representing approximately 14% of our total associate base at our company headquarters as well as at some other offices."
Among those impacted by the layoffs were the staff of GameStop's long-running magazine, Game Informer. Nearly half of the magazine's staff was reportedly let go, according to Kotaku.
"I love Game Informer, its people and its readers more than any corporation could," Game Informer Editor-in-Chief Andy McNamara said on Twitter. "I will address all the issues when I can, but for now I need to focus on my GI family."
Despite the struggles GameStop has faced as a retailer, Game Informer remains one of the most popular magazines in the United States; it has a larger readership than major magazines like Time and People.
Both rounds of layoffs are part of GameStop's three-part plan to turn the company around, under CEO George Sherman - its third CEO in two years.
The first step involves addressing issues with so-called SG & A, a financial term that stands for Selling, General and Administrative Expenses. In simpler terms: That means lowering the cost of salaries, taxes, advertising, and other nonproduction costs.
In even simpler terms: It means layoffs.
The statement from GameStop following this week's layoffs spells out as much: "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."
As of Wednesday afternoon, GameStop stock was trading in the mid-$3 range - the company is expected to report second quarter results in the coming weeks.
Walking the streets at night, thinking. GI HQ pictured. ❤️s out to everyone. pic.twitter.com/jcQchiZcb4- Andy McNamara (@GI_AndyMc) August 21, 2019
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