GameStop fires its CFO and announces layoffs as part of turnaround plan

• GameStop’s CFO was “fired because he was not the appropriate culture fit” source says.
• GamesStop has been reinventing itself to keep up with the online-dominant videogame industry.
• Shares of GameStop fell by more than 6% in extended trading.

As part of an aggressive turnaround strategy, GameStop has removed its Chief Financial Officer, Mike Recupero, and is undertaking personnel reductions across divisions, the videogame retailer stated on Thursday.

Recupero, who started working for the company just over a year ago, was “fired because he was not the appropriate culture fit” and “too hands off,” a person with knowledge of the situation. Ryan Cohen, the CEO of GameStop, allegedly forced him leave.

Also Read

GameStop joins the bandwagon of meme stocks with its share split

Video-game retailer GameStop's board approves a four-for-one stock split. A stock split...

The company’s chief accounting officer, Diana Jajeh, will take on the role of CFO. According to a filing with the U.S. Securities and Exchange Commission, she will begin with an annual salary of $200,000 and be qualified for a “transformation bonus” for a total of $1,965,000.

The individual familiar with the situation said that the layoffs, which were disclosed in a message to employees, will be on the corporate side of the business rather than at its stores and are meant to “remove bloat” while GameStop invests in other areas.

The established brick-and-mortar retailer has been attempting to reinvent itself in order to keep up with the online-dominant videogame industry. The company’s recovery will be led by Chewy founder Cohen, who was chosen last year. He hired a new group of business executives, including Recupero, a former employee of Amazon, and CEO Matt Furlong.

The memo announcing the adjustments states that the company has hired more than 600 corporate employees since the beginning of 2021.

GameStop’s stock has also attracted more interest because it frequently gets caught up in the meme stock craze and has significant price movements.

However, the firm has kept its options open. It hasn’t taken questions from analysts on the company’s earnings calls in more than a year and hasn’t offered many updates on a larger corporate plan. A CNBC inquiry for more information regarding the statement on Thursday went unanswered.

On an earnings call this spring, Furlong outlined some of the initiatives GameStop has done to revitalise its brand and spur development. He said that it had unveiled a redesigned app, attracted new participants to its rewards programme, and employed staff with experience in both blockchain gaming and e-commerce. By the end of the second quarter, a market for nonfungible tokens, or NFTs, is expected to launch.

Furlong stated in the message to employees distributed on Thursday and reviewed by CNBC that the business must make audacious moves as it makes investments in its digital future.

This entails cutting unnecessary expenses and conducting business with a strict owner’s mentality, he explained. “Everyone in the organisation must adopt a higher level of accountability for results and become even more hands-on.”

After rising by more than 15% during the regular session, the company’s shares dropped more than 6% in extended trading. GameStop’s market worth as of Thursday’s end was $10.29 billion thanks to its share price of $135.12 at that time.

GameStop said earlier this week that its board has approved a stock split of 4 for 1. When a firm wants to raise the number of shares and make their price more accessible to additional investors, a stock split is announced. The stock price increased by more than 8% as a result of the announcement.

Also Read

Midday market movers include Microsoft, Chewy, GameStop, MongoDB, & others

Microsoft — Microsoft shares rose 0.8 percent after falling earlier in the...