Shares of the company’s volatile shares fell 5% in pre-market trading on Friday. Shares rose 15% on Thursday after the company planned a four-for-one stock split, GameStop (GME) gave no reason to fire chief financial officer Michael Recupero, other than saying that under the terms of the his employment contract was “without cause.” “However, it is unusual for a company to reveal that a senior official had been fired, rather than simply saying he had left the company.
Accounting director Diana Saadeh-Jajeh has become the company’s new chief financial officer.
Although the company revealed the dismissal, its plans to cut staff were not. The company did not respond to requests for comment on its job-cutting plans, which were reported in several media reports citing a note to staff sent by CEO Matt Furlong.
“After making more than 600 corporate hires in 2021 and the first half of 2022, we have a better understanding of our transformation needs,” Furlong said in the note. “This has positioned us to adjust the number of employees in various corporate departments.”
During 2021, GameStop opened additional corporate offices in Seattle, Boston and Pembrook Pines, Florida, as “part of … efforts to attract talent,” according to a company document. In March, GameStop reported that it had 12,000 full-time employees and between 14,000 and 28,000 part-time workers worldwide, depending on the time of year.
Planned job cuts are part of a growing trend of staff cuts in companies. Overall, layoffs and layoffs have fallen to record low levels, according to recent Labor Department reports, as employers have struggled to find the workers they need to fill vacancies.
But concerns are also growing that the U.S. economy could be entering a recession, and some employers are cutting staff. U.S. employers announced plans to cut 32,500 jobs in June, a 57% jump from the announcement of cuts of 20,700 jobs in May, according to replacement company Challenger, Gray and Christmas.
GameStop lost $ 158 million in its most recent quarter, worse than the previous year’s $ 67 million loss. For its fiscal year ending in January, it lost $ 381 million, compared to a loss of $ 215 million for the fiscal year ending January 2021.
Despite these losses, GameStop became famous as one of the most extreme examples of so-called meme shares, a company whose shares were driven by a large number of individual investors betting on mistreated shares. Although GameStop has regularly lost money, it became the favorite of a group of investors who raised their shares by almost 2,500% in the first weeks of 2021, before returning most of those gains in the weeks posterior. Even with this stock price drop early last year, stocks ended 2021 with a 688% increase during the year.
But 2022 hasn’t been so good for GameStop shareholders, and shares were down about 21% this year before the stock price rose on Thursday. Even with this one-day gain, shares fell 9% during the year, ahead of Friday’s pre-market sale.