Dive Brief:
- GameStop has terminated Chief Financial Officer Michael Recupero’s employment, effective immediately, according to a securities filing.
- Recupero started less than a year ago, replacing former CFO Jim Bell amid an executive shakeup engineered by investor and current Chairman Ryan Cohen. Replacing Recupero is current Chief Accounting Officer Diana Saadeh-Jajeh.
- GameStop is also prepping corporate layoffs as it continues work on a digital and technological transformation, according to a memo reported on by CNBC and gaming news site Kotaku. GameStop did not immediately respond to a request for comment on the layoffs.
Dive Insight:
The executive shakeup Cohen orchestrated last year has gotten a shakeup. Recupero is the second top executive to leave who was hired under Cohen’s control of the company, following the departure of former Chief Operating Officer Jenna Owens, who left after seven months on the job.
Recupero had previously served as CFO of Amazon’s North American Consumer business, and was one of several key executives with backgrounds at major tech firms brought in during the Cohen era.
Cohen first joined GameStop’s board roughly a year and a half ago, after launching a campaign as an activist investor, chiding the company’s board for not acting with enough urgency to adapt to the era of e-commerce and digital gaming.
Since then, the company has hired hundreds in executive and technology positions. Its stock has gone through wild convolutions — with massive surges in price and new stock issues allowing the company to pay down debt. The company has launched a digital wallet and is prepping a non-fungible token marketplace, and has added tech offices, bulked up its supply chain capabilities and made other operational tweaks.
Both the company’s sales and losses have expanded in the time since Cohen took over. For 2021, GameStop’s net loss widened by 77%. In the company’s most recent period, net loss was more than doubled from last year.
GameStop said at the time of its earnings release that it had continued hiring employees with backgrounds in blockchain gaming, e-commerce, technology and operations.
An anonymous source told CNBC that the layoffs announced to staff were to “reduce bloat” as the company invests in other areas.
Much of that investment is essentially a speculative bet on the future of the retailer’s sector. As CEO Matt Furlong told analysts in June, GameStop is “pursuing growth opportunities in the cryptocurrency, NFT and Web3 gaming verticals, all of which we expect to be increasingly relevant for gamers of the future.” Furlong noted on the same conference call, “We firmly believe that digital assets are core to the future of gaming,” according to a Seeking Alpha transcript.
Jefferies analysts said in June, following the call, that they were “encouraged to again look back at progress over the past 12 months regarding increased customer focus, offering depth, competitive pricing, + improved fulfillment speed, services, & experiences.” They also noted, however, that “fundamental investors we speak with remain skeptical of the poor economics of the legacy business + growth focused cash-burn.”
