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Video game retailer GameStop announced on Thursday that it has fired Chief Financial Officer Mike Recupero and cut jobs across divisions as part of an aggressive transformation plan.
Recupero, who joined the company about a year ago, was “fired because he didn’t fit the company’s culture” and was “too laissez-faire,” a person familiar with the matter told the media. He was kicked out by GameStop Chairman Ryan Cohen, the person said.
Diana Jajeh, the company’s chief accounting officer, will become the new chief financial officer. According to an SEC filing, she starts at $200,000 and is eligible for a “transition bonus” totaling $1.965 million.
In a memo to employees, GameStop announced the layoffs, which are across the company, not in stores, in an effort to “reduce bloat” as GameStop invests in other areas, according to people familiar with the matter.
The traditional brick-and-mortar retailer has struggled to reinvent itself to catch up with the video game business, which has largely moved online. Cohen, the founder of shopping site Chewy, was named last year to lead the company’s attempt to turn the company around. He brought on a new group of corporate leaders, including CEO Matt Furlong and Recupero.
The company has hired more than 600 people since early 2021, according to the memo announcing the changes.
GameStop’s stock is also highly watched, often caught in a “stock frenzy” that sees its stock price fluctuate wildly.
However, the retailer has been tight-lipped. The company has provided few updates on corporate strategy and hasn’t answered analysts’ questions on the company’s earnings call for more than a year. Media asked the company for more details on Thursday’s announcement, but the company did not respond.
Furlong highlighted some of the steps GameStop is taking to innovate the brand and drive growth during its earnings call this spring. The company has launched a redesigned app that has attracted new members to its rewards program and hired people with backgrounds in e-commerce and blockchain gaming, he said. The company plans to launch a non-fungible token (NFT) marketplace by the end of the second quarter.
Furlong also said in the memo that companies must take bold steps when investing in their digital future.
“It means eliminating excess costs and operating with a strong owner mentality,” he said. “Everyone in the company has to be more hands-on and take more responsibility for results.”
Shares of the company fell more than 6% in after-hours trading after rising more than 15% in regular trading. Shares of GameStop were trading at $135.12 as of Thursday’s close, giving the company a market value of $10.29 billion.
Earlier this week, GameStop said its board had approved a 1:4 stock split (a stock split that occurs when a company wants to increase the number of shares and get more investors to think its price is acceptable) . The news sent the company’s shares up more than 8%.