GameStop shares fall as CFO fired and huge job cuts revealed

An internal memo has revealed big changes at an American video game giant, sending shares falling.

Video game giant GameStop has fired its chief financial officer and is cutting staff, an internal memo obtained by media has revealed.

The memo written to employees from chief executive Matt Furlong said “a number of” staff would be laid off and chief accounting officer Diana Jajeh would replace current CFO Mike Recupero, according to CNBC, which published the memo in full.

A person familiar with the matter told CNBC that the job cuts would be on the corporate side of the business rather than in stores.

In the memo, Mr Furlong said the company would make “significant investment” in its store leaders and field employees. He said they were the “heart of GameStop” and further details would be shared in coming weeks.

The job cuts are believed to be on the corporate side of the business and not in stores. Picture: Spencer Platt/Getty Images/AFP

While the exact number of job cuts has not been made clear, Yahoo has reported that in verbal communication delivered across several live meetings, employees were told there would be a 25 per cent reduction in staff. However, that number may only include corporate staff.

In the memo, Mr Furlong said more than 600 “corporate hires” were made last year and earlier this year.

“These changes will enable us to operate in a profitable manner as we execute against our strategy of pursuing sales growth in our commerce business and launching new products that empower customers within the digital asset and web3 gaming verticals,” he reportedly wrote in the memo.

He also said: “Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results.”

GameStop confirmed Ms Saadeh-Jajeh would be taking over as CFO immediately and that it had terminated Mr Recupero’s employment in a statement on its website.

Mr Furlong’s memo sent shares of the video game retailer down 8 per cent in extended trading, according to Reuters.

Shares had closed about 15 per cent higher in regular trading.

Earlier in the week, shares had jumped more than 8 per cent in extended trading after the company said its board had approved a 4-for-1 stock split, which will take effect later this month.

A stock split increases the number of shares in a company and makes them more affordable to investors.

GameStop has not returned media requests for comment.

This brutal note on the outside of a closed GameStop store was posted on Reddit.

Last month. a GameStop store at a shopping centre in Nebraska shut down unexpectedly after four staff members abruptly quit.

Once they left, customers found a brutal note on the front door.

“We regret to inform you that we all quit,” the note said.

“Our district manager has no respect for us as employees or as human beings.

“We have been told by our district manager that we were supposed to have had this store achieving sales quotas and running perfectly months ago. Which was months before a lot of us even got hired. Unfortunately, despite the staff’s best efforts, we are not god.”

The incident was part of ongoing turmoil between GameStop and employees, which comes at a time when digital game sales are making it tough for traditional brick and mortar stores to compete.

GameStop became the world’s biggest meme stock last year, with its shares rising about 1000 per cent in two weeks.

The GME share price surged thanks to a group of amateur investors on the subreddit r/wallstreetbets who banded together to fight short sellers.

Hedge fund Melvin Capital was nearly ruined after it made huge bets that GameStop stock would crash.

The share price of a little-known Australian mining company — GME Resources Limited — piggybacked on the surge.

Investors apparently mistook the Aussie company for the similarly-named cult US stock.