GameStop CFO out, layoffs announced, stock drops

GameStop is making significant changes to its workforce, including laying off staff and investing in store managers and field employees, according to an internal memo and a source familiar with the matter.

“Change will be a constant as we evolve our commerce business and launch new products through our blockchain group,” Gamestop CEO Matt Furlong wrote in an internal memo. “After investing heavily in personnel, technology, inventory and supply chain infrastructure over the past 18 months, our focus is on achieving sustained profitability. This means eliminating excess costs and operating with an intense owner’s mentality.”

GameStop stock tumbled as much as 10% in after-hours after seeing a 15% rise during Thursday’s session following the announcement of a 4-for-1 stock split that will take effect on July 22.

The degree of layoffs is unclear, according to a source familiar with the matter. In verbal communication delivered across several live meetings, GameStop employees were told that there would be a 25% reduction in staff — but that number may only include corporate staff and not store employees.

The company did not respond to requests for comment.

“After making more than 600 corporate hires in 2021 and the first half of 2022, … we’re making a number of reductions to help us keep things simple and operate nimbly with the right talent in place,” the memo stated.

Furlong added that GameStop will be “making a significant investment in our Store Leaders and field employees,” later adding that the company would “be sharing details regarding this investment in the coming weeks.”

The company also announced that GameStop Chief Financial Officer Mike Recupero, who has held the position for more than a year, is leaving the company and would be replaced by Chief Accounting Officer Diana Jajeh.

In terms of the stock split, the value of GME holdings existing shareholders will not change, though the quantity of shares will quadruple.

Such a split can be used by companies to make their equity more easier to purchase for smaller investors, sometimes resulting in more demand and better liquidity for a companies.

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