The retailer said the job cuts are part of its 'strategic plan to achieve profitability.'
GameStop is laying off an unknown number of staff but admits the cuts might "strain" its existing resources. The video game retailer shared the news annual 10-K report.
"As part of our strategic plan to achieve profitability, we have recently undertaken cost reduction measures and other initiatives to improve the efficiency of our operations, including initiatives to reduce headcount," it wrote.
"These initiatives could strain our existing resources, and we could experience operating difficulties in managing our business, including difficulties in hiring, managing and retaining employees. If we do not adapt, we may experience erosion to our brand, the quality of our products and services may suffer and our operating results may be negatively impacted."
GameStop noted that it exited its operations in Ireland, Switzerland, and Austria during the 2023 fiscal year and said it will continue to evaluate its business portfolio to validate their "strategic and financial fit."
"While we expect our cost containment efforts to yield reductions in SG&A expenses in the long term, we have incurred and may continue to incur non-recurring costs related to these efforts in the short term," it added.
Moving forward, the company will continue to focus on "cost containment" as it attempts to boost operational efficiency and achieve profitability.
On that subject, GameStop reported net sales of $5.27 billion during the previous fiscal year. That's an 11 percent decrease on the net sales of $5.92 billion it delivered in fiscal 2022. "
Net income increased to $6.7 million, which is an upswing on the $313.1 million loss recorded in fiscal 2022. The company did, however, report an operating loss of $34.5 million–though, again, that's an improvement on the $311.6 million operating loss it delivered in fiscal 2022.
In another SEC filing published alongside its financial roundup, GameStop announced it has promoted current interim principal financial officer, Daniel Moore, to the role of principal financial officer.
After nabbing the permanent position, Moore will continue to serve as the company's principal accounting officer. In an offer letter published online, GameStop said Moore will earn an annualized salary of $160,000 and confirmed " all equity awards previously granted to Mr. Moore will continue to vest in accordance with their original terms."
The letter added that Moore received $400,000 in "transformation bonuses" over a two year period that began on July 1, 2021, and confirmed those bonuses have "been paid in full."
Regarding those equity awards, Moore has been granted over 27,000 restricted stock units of the company's common stock since October 1, 2022. On November 1, 2023, he was granted an additional 6,641 restricted shares of the company's common stock.
The letter is a fascinating insight into how much companies like GameStop spend on hiring and retaining corporate brass while laying off workers across the company. You can read it in full right here.
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