Huge cuts made within GameStop Corporation have affected approximately 14% of the associate base at the company’s headquarters, as well as many of its subsidiaries, such as Game Informer. GameStop Corporation is the parent company of both video game retail chain GameStop and video game magazine Game Informer. Recently, they laid off over 120 of their employees, which constitutes the aforementioned 14% of their associate base at both their headquarters and some of their other offices.
According to a GameStop Spokesperson, “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. 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.”
It’s no great mystery that GameStop has been experiencing a significant drop in sales recently. Back in May, they reported an overall 13% decrease in their total sales for the first quarter. And in March, they hired a new CEO, George Sherman, who represented the fifth leadership change in the company in just under two years. Sherman swore to ‘transform the business.”
Both former editors and writers for Game Informer tweeted about their layoffs on Tuesday, revealing just how many of GI’s staff had suffered such a fate. Game Informer began all the way back in 1991, though it has been owned by GameStop Corporation since 2000. As of 2017, the magazine had over 7.5 million readers.
GameStop Corporation itself didn’t give any information as to exactly how many employees at each individual office were laid off, though Game Informer editor-in-chief Andy McNamara posted a statement on Wednesday that at least seven staffers had been let go from GI publication.
“I’m saddened by yesterday’s news; the Game Informer team means the world to me,” he said. “You, our readers who have supported us over the years – mean the world to us. I can’t thank them or you enough. ”
What this massive layoff implies for GameStop is pretty clear; they aren’t making enough money to pay all of their employees, and it’s no mystery as to why this is the case. People just aren’t as interested in buying physical copies of video games as they used to be. With digital purchases and downloads available right from one’s own console, few people feel the need to go out to a brick and mortar store to buy a physical game. Even if they are interested in special edition releases, those can usually be ordered online as well.
There’s no doubt that the niche GameStop has provided for is slowly dwindling, but whether or not they’ll be able to overcome that obstacle remains to be seen as gaming continues to evolve, potentially into the cloud.