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Do the Gamestop layoffs signal another challenge for the struggling retailer?

5 months ago by Jared Russo in Retail
GameStop CEO George Sherman hopes to "transform" the company before it's too late

Gamestop (NYSE: GME) cutting even more staff this week spells trouble for the Texas-based retailer. With the rise of digital distribution, brick-and-mortar stores selling games that could be easily downloaded is a thing of the past - but the retailers keep fighting off the seemingly-inevitable.

Gamestop has been written off many times as an afterthought of the retail apocalypse. But when we look at the alternative data, it may tell another story.

This could be a case of getting rid of good jobs for more part-time work, and purging staff to bring in lower paid workers. It's a strategy that is catching on with retailers struggling to make ends meet in a market that has become increasingly challenging to brick-and-mortar companies. 

As long as people want to purchase their games on a disc - and the next set of gaming consoles releasing in 2020 have disc trays - there will always be a need for Gamestop. And as sad as it is to see half of Game Informer's staff get laid off (the magazine was purchased back in 2000) there's a renewed focus to sell more toys and create more ThinkGeek shops for geek paraphernalia, Funko Pops, shirts, and other nerd ephemera.

Once the next generation starts in fall of next year, people will want their PlayStation 5 and Xbox 4 for the holiday season. After that is anyone's guess. 

Earlier in the summer new GameStop CEO George Sherman offered a plan to evolve the company's business to stay afloat. He is the fifth man to be CEO of Gamestop in the last two years. Developing new revenue streams and interactive media seemed to be the key points Sherman established, and it's only a matter of time until we see if they pay off, or we may get a sixth CEO in half-as-many years.

About the Data: 

Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

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Jared Russo

Jared is an editor for Thinknum, and has been writing for more than a decade. He previously worked at AOL, Vice, Google, Dotdash, and Sirius XM.

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