GameStop Announces Job Reductions Due to Steep Drop in Sales
Bollywoodfever, March, 27: GameStop, a leading U.S. video game retailer, has made the decision to reduce its workforce following a significant downturn in sales, which has been described by analysts as “unsustainable.”
The retailer’s sales for the fourth quarter amounted to $1.794 billion, a decrease from $2.226 billion in the same quarter of the previous year.
Although the net income for the fourth quarter showed an improvement, rising to $63.1 million from $48.2 million the year before, the overall fiscal year 2023 sales dropped to $5.273 billion from $5.927 billion in fiscal year 2022, with net income at $6.7 million compared to the previous year’s net loss of $313.1 million.
Despite the improvement in net income, the sharp fall in sales has raised concerns among analysts. Michael Pachter, an analyst from Wedbush Securities, highlighted to Reuters the impact of digital downloads on physical retail sales, pointing out the diminishing need for consumers to visit physical stores.
Pachter expressed skepticism regarding the potential for sales recovery without effective strategies to attract store traffic, predicting ongoing sales reductions.
GameStop has not released any statements from CEO Ryan Cohen nor conducted an earnings conference call. However, Reuters reports that GameStop has implemented job cuts to slash costs, though the exact number of affected positions remains unspecified.
As of February 3, GameStop’s workforce included approximately 8,000 full-time employees and a variable number of part-time employees ranging from 13,000 to 18,000, down from 11,000 full-time and 14,000 to 27,000 part-time employees in 2023. These layoffs have led to a 21.2% reduction in expenses.
In a significant strategic shift, GameStop shuttered its NFT marketplace nearly two years after its launch, attributing the decision to the uncertainties surrounding NFTs and cryptocurrencies. This move was anticipated following the earlier closure of its cryptocurrency wallet in August 2023.
GameStop initially ventured into the cryptocurrency and NFT space in January 2022, hiring a team of over 20 to spearhead its NFT division. This was part of the company’s broader strategy to diversify its business interests away from its traditional retail operations, which have faced challenges in the digital era of gaming.
The decision to wind down its NFT marketplace came after GameStop announced plans in December 2022 to dial back its focus on NFT and cryptocurrency initiatives, signaling a retreat from the sector less than a year into its engagement.
Additionally, former CFO Diana Saadeh-Jajeh, who played a crucial role in GameStop’s digital strategy, including its NFT, digital wallet, and cryptocurrency initiatives, resigned in August 2022.
Also Read, Resilient Residents of New England and New York Shovel Out Following Severe Winter Blast
Bookmark and Follow us for more News
