game stop On Thursday, the video game retailer announced the firing of CFO Mike Recupero and layoffs across departments as part of a restructuring plan.
Recupero, who joined the company about a year ago, was “fired because he didn’t fit in with the corporate culture” and was “too inconsiderate,” a person familiar with the matter told CNBC. According to the source, he was pushed out by GameStop chairman Ryan Cohen.
Diana Jajeh, the company’s chief accountant, will become chief financial officer. According to the filing with the U.S. Securities and Exchange Commission, she will have a starting annual salary of $200,000 and will be eligible for a “transformation bonus” totaling $1,965,000.
The layoffs, announced in an employee memo obtained by CNBC, are on the corporate side of the company, not its stores, according to a person familiar with the matter, and are meant to “reduce bloat” as GameStop invests. in other areas.
An outdated brick-and-mortar retailer is trying to reinvent itself and catch up with a video game business that has largely moved online. Chewing founder Cohen filmed last year lead the recovery of the company. He led a new roster of corporate leaders, including CEO Matt Furlong and Recupero, previously Amazon.
According to the change memorandum, the company has hired more than 600 corporate employees since the beginning of 2021.
GameStop’s stock has also gained a lot of attention, often getting into the hype around meme stock and showing wild swings in the price of its stock.
However, the retailer kept their cards close to the vest. He provided several updates on the broader corporate strategy and did not respond to analyst questions about the company’s earnings for more than a year. He did not respond to CNBC’s request for more details about Thursday’s announcement.
Furlong highlighted some of the steps GameStop has taken to revamp its brand and drive growth on the earnings call this spring. He said the company launched a redesigned app, attracted new members to its rewards program, and hired people with experience in e-commerce and blockchain games. By the end of the second quarter, the company plans to debut in the non-fungible token or NFT market.
In a memo sent to employees Thursday and obtained by CNBC, Furlong said the company must take bold steps by investing in its digital future.
“That means eliminating excess costs and working with an intensive owner mentality,” he said. “Everyone in the organization needs to become even more hands-on and take on an increased level of accountability for results.”
Shares of the company fell more than 6% in extended trading after gaining more than 15% in the regular session. As of Thursday’s close, GameStop shares were trading at $135.12, giving the company a market value of $10.29 billion.
GameStop said earlier this week that his reign approved a 4-to-1 stock split. A stock split occurs when a company wants to increase the number of shares and make their price affordable to more investors. This news triggered a jump in the value of shares by more than 8%.
Here’s the full memo sent to GameStop staff on Thursday:
Change will be permanent as we develop our commercial business and launch new products through our blockchain group. After significant investments in people, technology, inventory and supply chain infrastructure over the past 18 months, we have focused on achieving sustainable profitability. This means eliminating excess costs and working with an intense owner mentality. Everyone in the organization needs to become even more hands-on and take on an increased level of accountability for results.
With that said, I’ll be in touch today to share three organizational updates:
With over 600 corporate employees in 2021 and the first half of 2022, we have a better understanding of our transformation needs. This allowed us to correctly calculate the number of employees in several corporate departments. Today, we’re making a number of cuts to help us streamline our work and quickly reach the right talent.
2. We are going to invest heavily in our store managers and field employees, who play a critical role in meeting the needs of our customers. These people are, in many ways, the heart of GameStop. We will share details about these investments in the coming weeks.
3. Mike Recupero, who has served as chief financial officer since last June, is leaving. Diana Jajeh, who was our Chief Accountant and has deep institutional knowledge of the business, has been appointed Chief Financial Officer.
These changes will enable us to operate profitably as we implement our strategy to drive sales growth across our commercial business and launch new products that empower customers across the digital asset and web3 gaming verticals. I am confident that our team will move forward and thank you again for your continued dedication and focus.