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On Tuesday, several GameStop employees interviewed Reddit to announce the firing of their regional sales managers. These anecdotal reports combined with tips for Kotaku some layoffs, have since been reinforced by an email from GameStop management, whose authenticity Kotaku confirmed that more than 50 people had been fired from the company's regional sales teams.
"As part of our ongoing GameStop Reboot Transformation initiative, a dedicated team, including Vice Presidents of Retail, HR, LP. and the US Store Operations management team, have worked diligently to realign our current regions and districts on the ground to reduce our cost structure and improve the effectiveness of our leadership organization on the land so we can reinvest in the business, "reads in an email sent to employees of the stores involved on behalf of Gary Riding, senior vice president of stores in the United States.
"Unfortunately, with these changes, more than 50 leaders in the field have been affected and will leave the GameStop team," he continues. "This includes regions, districts, human resources [Human Resources, and LP [Loss Prevention] leaders. These decisions are not easy, but they are necessary to help us reduce costs in order to allow investments in income-generating initiatives that will contribute to the growth of the company. "
One of the employees involved, who spoke to Kotaku under cover of anonymity, confirmed that the email was real. "It was very widespread. More than 50 DL [District Leaders], 6 RL [Regional Leaders], many hours [Human Resources] and Lp [Loss Prevention] "The person thought that most of the people targeted by the layoffs were highly paid district managers, who were responsible for coordinating several stores, as well as underachieving performers.
"Most districts and regions are mbadive now," said the former employee. "They have more than 20 stores and the quality of life, I guess, will go down." Before the restructuring, they said the district leaders were monitoring an average of 15 stores or less. Earlier this year, GameStop reportedly laid off a dozen staff responsible for marketing and maintaining the website for ThinkGeek, the toy brand acquired by GameStop in 2015 for $ 140 million.
The "income-generating initiatives" mentioned in the e-mail could refer to business projects aimed at rotating the activities of esports. In July, GameStop announced that it had partnered with a design firm to fundamentally alter the operation of some of its stores, including creating stores designed for the "Local Electronic League" and others exclusively dedicated to games retro.
In June, the company's stock price fell 30% to $ 5.04, its lowest level in more than 10 years, following the announcement. get rid of its quarterly dividend to shareholders in order to save $ 157 million a year. Nearly two months later, his price is $ 4.02.
At least part of GameStop's recent financial problems, which prevented the company from finding a potential buyer earlier this year, is probably due to the abandonment of the physical games in this console cycle. In a call for results on June 4, CEO George Sherman announced that used-game sales had dropped 20.3%. And earlier this week, Sony announced in its earnings report that for the first time in its history, digital game sales had exceeded 50% of the games purchased for the PS4 in the previous quarter.
This week's layoffs come just before the company's annual GME conference, to be held at the end of the month in Nashville, Tennessee.
GameStop has not responded to a request for comment.
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