GameStop Announces Job Cuts, Fired CFO As Video Game Retailer Shares Fall

An internal memorandum revealed big changes at the American video game giant, causing the stock to drop.

Video game giant GameStop has fired its chief financial officer and is cutting staff, according to a memo obtained by the media.

A memo written to employees by CEO Matt Furlong says “some” employees will be laid off and chief accountant Diana Jajeh will replace current CFO Mike Recupero. CNBCwhich published the memorandum in full.

A person familiar with the matter told CNBC that the job cuts would be on the corporate side of the business, not stores.

In a memo, Mr. Furlong said the company would make a “significant investment” in its store executives and field employees. He said they are “the heart of GameStop” and further details will be released in the coming weeks.

Although the exact number of job cuts is not specified, Yahoo reported that during the course of verbal communication in several live meetings, employees were told that the staff would be reduced by 25%. However, this number can only include corporate personnel.

In a memo, Mr. Furlong said more than 600 “corporate hires” were accepted last year and earlier this year.

“These changes will enable us to operate profitably as we implement our strategy to grow sales across our commercial business and launch new products that empower customers across the digital asset and web gaming verticals,” the statement said.

He also said, “Everyone in the organization needs to become even more hands-on and take on an increased level of accountability for results.”

GameStop has confirmed that Ms. Saade-Jajeh will immediately take over as CFO and that it has fired Mr. Recupero in a statement on its website.

According to Mr. Furlong’s memo, the video game retailer’s shares fell 8% in extended trading. Reuters.

Shares closed about 15% higher in normal trading.

Earlier this week, shares jumped more than 8% in extended trading after the company said its board of directors had approved a 4-for-1 share split that would take effect later this month.

A stock split increases the number of shares in a company and makes them more available to investors.

GameStop did not respond to media requests for comment.

Last month. GameStop store in a mall in Nebraska closed unexpectedly after four employees abruptly quit.

As they left, the customers found a cruel note on the front door.

“We regret to inform you that we have all retired,” the note said.

“Our district manager does not respect us either as employees or as people.

“Our regional manager told us that we had to get this store to meet the sales target and run perfectly a few months ago. This was months before many of us were even hired. Unfortunately, despite the staff’s best efforts, we are not gods.”

The incident was part of an ongoing turmoil between GameStop and employees, which comes at a time when digital game sales make it difficult for traditional physical stores to compete.

game stop last year became the world’s largest repository of memeswhile its shares rose by about 1,000 percent in two weeks.

GME’s share price rose thanks to a group of amateur investors on the r/wallstreetbets subreddit who banded together to fight short sellers.

Hedge fund Melvin Capital was almost bankrupt after making huge bets on the GameStop stock crash.

The share price of little-known Australian mining company GME Resources Limited jumped.

Investors appear to have mistook the Australian company for the iconic American stock of the same name.

Originally published as GameStop stock falls as CFO fires, massive job cuts