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GameStop fires CEO Matt Furlong after abysmal start to the Fiscal Year

By Daniel Davis

LEVITTOWN, NEW YORK - SEPTEMBER 15: A general view of a Game Stop store on September 15, 2022 in Levittown, New York, United States. Many families along with businesses are suffering the effects of inflation as the economy is dictating a change in spending habits. (Photo by Bruce Bennett/Getty Images)
LEVITTOWN, NEW YORK - SEPTEMBER 15: A general view of a Game Stop store on September 15, 2022 in Levittown, New York, United States. Many families along with businesses are suffering the effects of inflation as the economy is dictating a change in spending habits. (Photo by Bruce Bennett/Getty Images) /
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GameStop has officially cut ties with former CEO Matt Furlong after an abysmal start to the Fiscal Year. Ryan Cohen, who joined GameStop’s board in 2021, was named executive chairman but that didn’t stop the hemorrhaging as GameStop’s stock fell 15 percent after opening.

The company didn’t offer a reason and in fact, filed paperwork stated Furlong was able to receive payments “associated with a termination without cause.”

GameStop has historically been losing business since the gaming market has been going increasingly digital and PC gamers had an uptick during the COVID-19 lockdowns. Furlong was the fifth CEO in 5 years and seeing as he came from Amazon many speculated that GameStop would try to get into the online business, but that didn’t happen.

Workers at GameStop have high turnover rates mainly due to the high stress work environment and the impossible sales numbers pushed down from corporate. Last September, the company announced raises and bonuses for employees but rather only gave out $0.50 to employees, while the CEO boasted a profit of nearly $17 million.

GameStop has also had issues on the back end as gamers have stated their pre-orders have gone missing despite the company basically gaslighting gamers into saying everything is fine while staff have overwhelming stated the company is a mess as a whole. Many employees stated the issue stems from the SAP software they use. Not to mention the entire debacle with the Resident Evil 4 Collectors edition. I’d like to think that these issues were just based in error, but when it’s this many problems in so little time, one can only assume it’s a management issue.

All these issues have culminated in the firing of Furlong and the company has handed the keys to Cohen. Cohen was the founder of Chewy, the online pet product delivery service, and has been an activist investor ever since. Following Cohen is former Chewy Executive Alan Attal who has been named the independent Chairman director of the board.

The company has attributed the fall of sales to lack of AAA titles being produced in the past few years and inflation as gamers are spending less on games than they would normally have in the past few years. Sales dropped over $170 million in collectables which was up from $120 million the year before. The total income was $1.237 billion for the first quarter of 2023 down from $1.378 billion the year before during the same time period. However, the company did boast a reduction from $452.2 million down to $345.7 million in business costs from the last year, a reduction of about $90 million. This can be attribute to the closing of certain stores and the slashing of workforce.

The company also stated it would not hold a conference call going over the earnings report.

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