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GameStop Eliminates 120 Staff As Sales Drop

gamestop aug21 lt

Video game retailer GameStop Corp. laid off more than 120 employees, or nearly 14 percent of the total workforce at its corporate headquarters and at some other offices, according to reports.

The layoffs also include senior editorial staff at Game Informer, the company's print and digital publication. Some of the senior staff at Game Informer took to Twitter to announce about their layoffs.

Reports quoted a GameStop spokesperson as saying that the action was required in order to cut costs and optimize the business to meet future business objectives.

The video game retailer has been witnessing declining sales in recent months. It has been hurt by the rapidly changing retail landscape and the increasing customer shift towards digital sales.

In June, the company had reported a fall in profit for the first quarter from the year-ago period, while revenues declined 13 percent. New hardware sales, including the Microsoft XboxOne and PlayStation 4 console sales, decreased 35 percent.

GameStop is also cutting its quarterly dividend in an effort to strengthen its balance sheet and provide increased financial flexibility.

The company projects its fiscal year 2019 sales to decline 5 percent to 10 percent.

Earlier this year, the retailer had appointed George Sherman as its new chief executive officer, succeeding Shane Kim. The company also said it has terminated efforts to pursue a sale of the company due to the lack of available financing on terms that would be commercially acceptable to a prospective acquirer.

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