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GameStop calls falling sales ‘unsustainable’, lays off staff

Video game retailer GameStop reported a sharp drop in fourth-quarter revenue and said they had to lay off an unspecified number of employees, Reuters reported.

As of February 3, the company had approximately 8,000 full-time salaried and hourly employees worldwide, and 13,000 to 18,000 part-time, hourly employees. The number of layoffs is unclear.

Fourth-quarter revenue was reported at $1.79 billion, down from $2.23 billion last year. Shares are also down 16% in long-term trading.

Other cost-cutting measures are said to include exiting operations in Ireland, Switzerland and Austria.

Wedbush Securities analyst Michael Pachter provided Reuters with a possible reason for the decline: “Increasing digital downloads are hurting brick-and-mortar retail, and if consumers simply Order the game and buy it, there’s no reason to go to the store. Download now…

“I suspect they will keep cutting costs to break even or better, but their sales will inevitably drop to unsustainable levels.”

The news comes in stark contrast to 2021, which has been a wild year for the company as it became one of the most popular meme stocks in the world.

Against this backdrop, the GameStop NFT market was launched in 2022 but was terminated earlier this year. The company cited “ongoing regulatory uncertainty in the cryptocurrency space” as the reason behind it.

Gamer reaction to GameStop market

People took to Reddit to share their thoughts on the Texas company.

One user suggested a shakeup was needed: “As a business, I still think GameStop can thrive, especially in Canada, but their current CEO won’t.

“People are making too many terrible decisions. Video games are being drowned in Funko Pop stock.”

Other Reddit users, like “AuthenticatedUser,” said the store’s format was taking its toll: “It’s because they don’t stock it. Their policy now is not to stock anything except pre-orders and AAA games…”

Featured Image: Image by Sergei Tokmakov on Pixabay

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