Can retail be rescued? Why so many U.S. stores are closing
The struggling video game retailer GameStop is laying off 120 of its employees.
According to a statement from the company, the layoffs affect mostly its corporate staff at the Grapevine headquarters. It represents about 14 percent of the total number of employees at the corporate offices.
“While these changes are difficult, they were necessary to reduce costs and better align the organization with our efforts to optimize the business to meet our future objectives and success factors,” the statement said. “We recognize that this is a difficult day for our company and particularly for those associates impacted. We appreciate their dedication and service to GameStop and are committed to supporting them during this time of transition.”
The company said the layoffs were part of a “reboot” strategy after reporting a 13.3% decrease in sales in the first quarter of 2019 and a stock price that dropped 36% to $4.71 per share in June. Earlier this month, GameStop employees took to Reddit to announce that regional sales supervisors had been laid off.
For the past five years, GameStop has been facing the same struggles as all brick-and-mortar retailers, but the video game industry has experienced more online disruption than most. Gamers have increasingly turned to the online market for digital copies of games.
To offset its flagging sales, GameStop added more collectibles, used cell phones and other products, but it wasn’t enough to turn around its business model. Earlier this year, the company announced major partnerships with esports leagues in an effort to re-establish itself in the market, but analysts said in June after its dramatic drop in stock price that the company needs to take “aggressive action to remain relevant.”