GameStop laid off workers just weeks before the holidays, reportedly in a major blow to the team working on the company’s cryptocurrency initiative.
The Grapevine, Texas-based video game retailer has not confirmed any layoffs, but LinkedIn posts from current and former employees show a number of layoffs have taken place since Monday. According to Axios, teams working on blockchain wallets have been hit particularly hard. Former director of the logistics and transportation team, Mickey Kalish, said in a LinkedIn posting that the transportation department was “hugely impacted.”
GameStop lead engineer Daniel Williams wrote a simple post on LinkedIn:
On Tuesday, GameStop spokesman Gregory Marose said the company had no comment. The company released its latest quarterly results after the market closed on Wednesday, giving investors the latest glimpse into how the turnaround strategy laid out by activist investor-turned-chairman Ryan Cohen is progressing. I let
In an internal email obtained by gaming website Kotaku, GameStop CEO Matt Furlong said the job cuts will help the company achieve profitability.
“We recently completed several projects that were part of the early stages of our transformation, helping our business operate more efficiently,” Furlong wrote. “In addition, we continued to have clarity on the appropriate level of corporate staffing needed to meet our profitability and growth goals.”
GameStop has been working with blockchain technology and digital marketplaces to find ways to connect with gamers who are primarily streaming today. In September, it became the preferred retail partner of the now-defunct cryptocurrency exchange FTX, which is short on customer funds by at least $8 billion.
The company found itself in an unexpected financial position last year when it was at the center of a memetic stock boom in which traders hiked the stock to crowd out investors betting on the company’s demise. We had $1.3 billion in cash. That’s down to about $909 million as of September.
GameStop laid off employees in July as part of its transition to a digital future, according to a memo obtained by CNBC. Gamers are the natural audience for new technologies, which is why we invested in the non-fungible token and crypto space. However, the company is in a tough spot as cryptocurrency prices continue to fall after the crash a year ago.
The company released a wallet for sending and receiving cryptocurrencies and NFTs in May. It was designed to work in conjunction with the NFT Marketplace, which launched in July days after Amazon veteran Mike Recuero cut staff and fired his CFO. He was replaced by Diana Saadeh-Jajeh, formerly GameStop’s Chief Accounting Officer.
Other leadership changes this year included hiring new chief operating officer Nir Patel, formerly CEO of retailer Belk, and new CEO Furlong, who previously worked at Amazon.
In February, GameStop partnered with blockchain platform Immutable X. This was to offer up to $150 million in his IMX tokens upon reaching certain milestones. When the deal was announced, the IMX token was trading at $3.38. The price is now down to 48 cents.
Layoffs are tearing industries including technology and media apart, and recession fears are entrenched in corporate boardrooms. This week, consumer brands giant PepsiCo cut some jobs at its North American snacks and packaged foods business in Plano, Texas.