The company just started its third round of layoffs this year.
When you say the word crypto these days, the reaction to it is likely very different than it would have been a few years ago.
Back then, there was lots of buzz about the possibilities of digital currency. Well-respected billionaires like Tesla CEO Elon Musk and Twitter founder Jack Dorsey invested, leading others to do so as well. Retailers scrambled to accept bitcoin and other forms of crypto as payment, wanting to modernize themselves and keep up with the times. After all, if these giants of industry are doing it, the rest of us should too, right?
Sadly, 2022 has been a cruel year for crypto on the whole. Both Dorsey and Musk have changed their tune about it since a crypto winter hit mid-year, sending the value of digital currencies plummeting and leading many to wonder if this whole thing was a good idea after all.
Then November brought the absolute collapse of cryptocurrency exchange FTX, reducing founder Sam Bankman-Fried’s $21 billion fortune to nothing in a matter of days. For many already dubious about crypto, this turn of events shoved it into a freshly-dug grave and kicked dirt on top.
Now many of the businesses that hurried to support crypto are suddenly turning chilly about their investments. The latest of those, video game retailer GameStop (GME) – Get Free Report, has begun taking action on what may have been one of its last hopes for finding a foothold in the rapidly-changing video game retail market.
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What Happened With GameStop?
GameStop is the latest high-profile company to announce layoffs this December, following Amazon, Alphabet, DoorDash, and more.
Affected employees posted about the layoffs on LinkedIn on Dec. 5, Axios reports, with the team responsible for the company’s blockchain projects “heavily affected.”
Six software engineers confirmed they were laid off, including former lead software engineer Daniel Williams, who wrote, “Another big round of layoffs from GameStop currently in progress…E-commerce Product and Engineers. Lots of them. Please keep a lookout to help our friends find new homes quickly!!”
CEO Matt Furlong sent a chipper email out to staff, which was obtained by Kotaku.
“Now that we are emerging from the rebuilding phase of our transformation, GameStop has a strong foundation from which to pursue profitability in the near-term and sustainable growth over the long-term,” it read.
Furlong also named inflation and “weakened customer confidence” as reasons for the layoffs. The company also had two prior rounds of layoffs this year.
Before and After Meme Stock
The video game retailer has struggled to adapt as the video game market has shifted in a largely digital direction, leaving its stores barely staffed and with many employees walking out after claims of being disrespected by management and given “impossible” tasks.
Being embraced as a meme stock in January 2021 after fervent retail investors ganged up via Reddit’s Wall Street Bets sub, the retailer enjoyed some positive attention. But with its revenue steadily dropping since 2016, it was in need of more than that in order to remain relevant in the eyes of its customers.
In June 2022, GameStop announced that it would be moving into blockchain and NFTs, a move that seemed strange for a business that primarily appeals to folks that play video games. The general response of the gaming community to crypto and NFTs has been tepid at best and fairly negative at worst.
But with the cryptocurrency market once estimated to be valued at $2.2 billion by 2026, its most likely that GameStop just saw it as a lifeboat and grabbed it.
GameStop will report its quarterly earnings on Dec. 7.