GameStop has published its latest earnings briefing, and as part of it, the video game retailer said it was cutting an unspecified number of jobs, according to Reuters.
These layoffs could be part of the previously announced plan to close a GameStop Fulfillment Center in York, Pennsylvania; this move will impact more than 150 people.
GameStop’s latest data shows the company has around 8,000 full-time salaried and hourly workers globally. In addition, GameStop employs between 13,000 and 18,000 part-time, hourly workers depending on the time of year. These numbers are down substantially. During the previous fiscal year, GameStop had 11,000 full-time salaried and hourly workers and between 14,000 and 27,000 part-time hourly associates based on the time of year.
For the latest fiscal year, GameStop reported substantially lower expenses (down 21.2% to $357.1 million) due to having fewer people to pay, among other things. Wedbush Securities analyst Michael Pachter said he expects GameStop will continue to trim costs, but he said it is “inevitable that their sales will decline to an unsustainable level.”
For GameStop’s fiscal fourth quarter that ended on February 3, the retailer saw sales slide from $2.226 billion down to $1.784 billion. Profit, however, rose from $48.2 million to $63.1 million. For the full year, sales slumped from $5.927 billion to $5.273 billion. Net income, however, posted a dramatic surge from a net loss of $313.1 million to a profit of $6.7 million.
Pachter told Reuters that increases in digital game sales is negatively impacting GameStop’s bottom line. “There is simply no reason to go to the store if a consumer can just order a game and download it immediately,” he said.
GameStop also announced that, in an effort to reach “sustained profitability,” the company closed all of its stores in Ireland, Switzerland, and Austria. In the past fiscal year, GameStop closed 287 stores worldwide and now has 4,169 stores.
Following the “short-squeeze” situation in 2021 that saw GameStop’s stock price massively surge, GameStop’s new management, including CEO Ryan Cohen, announced a plan to make GameStop profitable again, something that the company has now achieved. This involved a variety of cost-cutting measures like layoffs and store closures, and, for a period of time, an attempt to get a foothold in the NFT space. However, GameStop’s NFT and crypto plans didn’t pan out and the company’s investments in that space have come to an end.
GameStop’s share price tumbled by more than 10% after the company announced its latest earnings results that showed lower sales results. Despite this, GameStop’s stock price remains up more than 400% in the past five years.
In other GameStop-related news, the company’s magazine, Game Informer, is now selling subscriptions directly, so you no longer need to sign up for GameStop’s loyalty program or buy issues individually.