GameStop Fires Top Executive, Layoffs Include Staff At Game Informer
The video game retailer also announces new CFO with $200,000 salary and a nearly $2 million bonus.
Video game retailer GameStop, which is in the process of pivoting its business around crypto, has fired one of its top executives and laid off a number of staff, including members of Game Informer.
In a filing with the US government, GameStop said it "terminated" CFO Michael Recupero effective immediately. Recupero started as GameStop CFO just about a year ago in June 2021.
In its filing, GameStop said Recupero was fired "without cause," but the company did not share any further details around the nature of circumstances of his exit. Recupero is not getting a severance payment beyond what was in his initial offer letter, but he is entitled to certain pay, rights, and benefits that were not disclosed in the filing.
Diana Saadeh-Jajeh, who was previously SVP and Chief Accounting Officer, is taking on the role of CFO. She will be paid an annual salary of $200,000 and is eligible for a "transformation bonus" in the amount of $1.965 million, to be paid in bi-weekly installments over a two-year period that started August 1, 2021. Saadeh-Jajeh also retains her original equity and cash incentive awards from her previous contract, as well as an additional grant of $1 million worth of GameStop stock.
In a memo to staff obtained by CNN, GameStop CEO Matt Furlong said the company hired more than 600 people for corporate positions in 2021 and the first half of 2022. The company also opened corporate offices in Seattle, Boston, and Pembrook Pines, Florida in 2021. In March, GameStop said it had 12,000 full-time employees and as many as 28,000 part-time workers at its stores around the world.
Separately, Kotaku cited Furlong's memo to staff pertaining to "reductions" to staffing levels to help the company work more "nimbly."
"Change will be a constant as we evolve our commerce business and launch new products through our blockchain group," Furlong said.
According to Kotaku, the cuts appear to be mainly at GameStop's Grapevine, Texas office, though workers at the retailer's magazine, Game Informer, were also affected. This was just the latest round of staffing reduction at GameStop, as the company's corporate headquarters had layoffs at the end of May 2022, impacting more than 100 people in a variety of positions, according to Kotaku.
Game Informer associate editor John Carson was among those laid off. Carson said Game Informer will continue to operate but with a "much obviously smaller staff than it should be."
Associate editor Wesley LeBlanc was let go as well. "I was laid off by GameStop yesterday, on my birthday, and am no longer an employee of Game Informer," LeBlanc wrote. "I am gutted and scared for what's next, whatever that may be. It still doesn't feel real tbh."
Jeff Akervik, Game Informer's creative director who had been laying out the magazine for the past 14 years, was also impacted by the cuts.
I was asked to wait a day to say anything officially, so here it is. Unfortunately, I am part of the GameStop layoffs and am no longer employed at Game Informer as of yesterday. I'll cherish my time there and the people I worked with even more.— John Carson (@John_Carson) July 8, 2022
Two quick things:— John Carson (@John_Carson) July 8, 2022
1. GI is still very much around, but the crew is operating with a much obviously smaller staff than it should be.
2. Support them and show them love as much as you can. There's so much talent in the entire staff
Sooo uhhh yeah, I was laid off by GameStop yesterday, on my birthday, and am no longer an employee of Game Informer. I am gutted and scared for what's next, whatever that may be. It still doesn't feel real tbh.— Wesley LeBlanc (@LeBlancWes) July 8, 2022
All good things must come to an end. After 14 amazing years at Game Informer, I was informed (ha) GameStop was no longer in need of my services. I wouldn’t trade my time at GI and the amazing people I’ve worked with - both past and present - for anything. I was very lucky indeed.— Jeff Akervik (@JeffAkervik) July 8, 2022
Earlier this week, GameStop conducted a four-for-one stock split. A stock split breaks existing shares down into smaller pieces. As a result, the total share count goes up and the price per share goes down. Alphabet, Amazon, and Tesla are all planning stock splits in the coming months.
These moves are happening as GameStop continues to lose lots of money. GameStop management said it is in the midst of a transforming its business away from being known as a "decaying" traditional brick-and-mortar retailer into a "technology-led organization." Looking to the future, GameStop said it plans to "rebuild and strengthen" its commerce business after years of underinvestment.
What's more, the company is looking to crypto, NFTs, and Web 3.0 as vectors of growth. These categories will be "increasingly relevant for gamers of the future," the company said. To that end, GameStop recently announced plans to launch the GameStop NFT marketplace later this year. This will allow users to store, send, receive, and use cryptocurrencies and NFTs across "decentralized apps."
GameStop is pushing further into crypto as the market for crypto begins to collapse, according to some reports.
Reggie Fils-Aime, the former Nintendo of America president who served on GameStop's board of directors for a period of time, has criticized GameStop management for not allowing him to attend planning sessions to map out GameStop's future.
"The issue was that as the strategy was beginning to be developed, I asked to be part of the team to develop the strategy. I knew the business. I knew it as a consumer, I knew it as a vendor; I had pretty strong opinions on how the business needed to be pivoted. But I was rebuffed," Fils-Aime said. "The perspective was, 'Reggie, we want to keep the team small... so it's going to be myself [Cohen] and a few of the people I brought on board.'"
Fils-Aime flat-out said billionaire GameStop investor Ryan Cohen and the team around him "don't know this business; don't understand the players."
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