GameStop has fired its chief financial officer, Mike Recupero, and is making staff cuts in different departments as part of an aggressive change plan, the video game retailer announced Thursday.
Recupero, who joined the company about a year ago, was “fired because he didn’t fit in with the right culture” and “was too free,” a person familiar with the matter told CNBC. He was fired by GameStop president Ryan Cohen, the person said.
Diana Jajeh, the company’s accounting director, will become chief financial officer. He will have an initial annual salary of $ 200,000, according to a filing with the U.S. Securities and Exchange Commission, and will be eligible for a “transformation bonus” for a total of $ 1,965,000.
The layoffs, which were announced in a note to employees obtained by CNBC, are in the corporate part of the company and not in its stores, according to the person familiar with the matter, and are intended to “reduce inflation “as GameStop reverses. in other areas.
The traditional retailer has been trying to reinvent itself and catch up with a video game business that has largely moved to the net. Chewy founder Cohen was selected last year to lead the company’s transformation. It incorporated a new list of corporate leaders, including CEO Matt Furlong and Recovery, before Amazon.
The company has made more than 600 corporate hires since early 2021, according to the note announcing the changes.
GameStop shares have also attracted a lot of attention, have often been dragged down by the frenzy of meme actions and have seen sharp fluctuations in the price of their shares.
However, the retailer has kept his cards close to the vest. He has provided few updates on a broader corporate strategy and has not received questions from analysts about the company’s earnings calls for more than a year. He did not respond to a request from CNBC for more details about Thursday’s announcement.
Furlong highlighted some steps GameStop has taken to update its brand and drive growth in a earnings call this spring. He said he has launched a redesigned app, attracted new members to its rewards program and hired people with a background in e-commerce and blockchain games. It plans to launch a non-consumable chip market, or NFT, by the end of the second quarter.
In the note sent to employees Thursday and obtained by CNBC, Furlong said the company must take bold steps as it invests in its digital future.
“That means eliminating excess costs and operating with an intense homeowner mentality,” he said. “Everyone in the organization needs to be even more practical and adopt a higher level of responsibility for results.”
The company’s shares fell more than 6% in extended trading after gaining more than 15% during the regular session. At the close on Thursday, GameStop shares were trading at $ 135.12, giving the company a market value of $ 10.29 million.
Earlier this week, GameStop said its board had approved a 4 by 1 stock split. A stock split is issued when a company wants to increase the number of shares and put its price on the reach of more investors. The news caused a jump of more than 8% in the share price.
Here is the full note sent Thursday to GameStop employees:
All,
Change will be a constant as we evolve our business and launch new products through our blockchain group. Having invested heavily in personnel, technology, inventory and supply chain infrastructure over the past 18 months, our goal is to achieve sustained profitability. This means eliminating excess costs and operating with an intense homeowner mentality. Everyone in the organization needs to be even more practical and adopt a higher level of responsibility for results.
That said, I get in touch today to share three organizational updates:
1. After making more than 600 corporate hires in 2021 and the first half of 2022, we have a better understanding of our transformation needs. This has positioned us to adjust the number of employees in various corporate departments. Today, we are making a series of reductions to help us keep things simple and operate agilely with the right talent.
2. We will make a significant investment in our store leaders and field employees, who play a key role in meeting the needs of our customers. These people are, in many ways, the heart of GameStop. In the coming weeks we will share details about this investment.
3. Mike Recupero, who has been our CFO since last June, is leaving. Diana Jajeh, who has been our accounting director and has strong institutional knowledge of the business, has been appointed CFO.
These changes will allow us to operate profitably as we execute our strategy of pursuing sales growth in our trading business and launching new products that empower customers within digital and vertical web gaming assets3. I am confident in the team we have in the future and thank you again for your dedication and continued attention.
Regards, Matt