The past few years have been turbulent for GameStop. A combination of increasing digital sales and stores like Walmart and Amazon aggressively lowering their prices on new video games has seen a drop in consumer interest in the 36-year-old video game-focused retail chain. It’s taken a toll.
In March 2017, GameStop announced plans to close 150 of its 7,500 stores. Speaking about the closures, Rob Lloyd, GameStop CFO at the time, said, “As we continue the transformation of GameStop, part of our diversification strategy is to rationalize our global store footprint to ensure we have the right mix of stores and merchandise that meets our customers’ needs.” That year, global sales for GameStop dropped by 13.6%.
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The problems didn’t stop there. In November 2018, GameStop reported a third-quarter loss of $488.6 million, which led to rumors of a buyout. As a whole, the company lost a record $673 million in 2018. A few months later, GameStop announced it was no longer pursuing a buyer, and the company’s stock dropped to its lowest value in 15 years.
2019 saw the company hire new CEO George Sherman, who held previous leadership roles at Advance Auto Parts, Best Buy, Target and Home Depot. Before he joined GameStop, Sherman was the CEO for Victra, a retailer for Verizon Wireless products.
After Sherman took over, the shakeup continued, as the company announced it would lay off 50 regional leaders. Finally, it announced the closure of another up to 200 “underperforming” stores worldwide last September. If you live in the United States, it’s possible you’ve seen doors closing in your neighborhood.
GameStop has taken action to try and reverse its downward trajectory. In 2019, it announced a new strategy to “reimagine” its stores with a “unique layout and purpose that appeal to gamers.”
“From store concepts that offer competitive sessions in home-grown e-Leagues to locations that sell strictly retro gaming software and hardware, GameStop will pilot the new store concepts in a select market to present something new to players both old and new”, read the announcement at the time. Last September, a store in Oklahoma showed the first fruits of GameStop’s labors, with a video tour of a new GameStop store design that included sofas, televisions with consoles hooked up, and areas to play tabletop games.
It’s a lot to happen to the retailer in a short space of time. Amidst all of the changes, store closures, and financial losses, it’s also a turbulent time to be a GameStop employee. I spoke with multiple employees across different stores to get their take on their working conditions, the mood inside the GameStop machine, and where they think the brand’s future is heading.
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Working at GameStop in 2020: Anxiety, Stress, and Low Morale
With so many changes happening within the company, most of the GameStop employees I spoke to said that morale at their stores is very low. Specifically, after last year’s announcement regarding the store closures, many employees said they are worried about the future of their stores, and their jobs. [poilib element=”quoteBox” parameters=”excerpt=%22Even%20rude%20people%20laughing%20about%20it%2C%20like%20people%20losing%20their%20jobs%20was%20a%20comedy.%22″]
This worry has been exacerbated by a flippant attitude from the general public. “We had customers come in every single day, several times a day asking about it or worried we were closing. Even rude people laughing about it, like people losing their jobs was a comedy. It was unnerving,” said one employee, who we’ll call Natalie.
“When the press announced last year our earnings call discussed closing 200 stores, multiple guests daily came in asking when and if we were closing,” said one manager, that we’ll call Sandra.
Sandra said she knows her store is performing well, so it was particularly hard to deal with the constant questions around store closures. “I read the news and finances but my whole staff doesn’t, so for a lot of them this caused a lot of anxiety and stress.”
“So imagine morale during holiday, our busiest time, if people asked you every day if you would have a job tomorrow, despite knowing your lease is fine and your store is fine. Or worse, being in the minority of stores who weren’t.”
I was told by some employees that GameStop corporate has made attempts to alleviate concerns. Specifically, multiple employees said they were told that only stores in close proximity to other stores in the same area would be closed.
But at some locations, I was told by employees that corporate had taken a more defensive stance. Instead of alleviating concerns, it had instead put the onus on staff to turn things around, demanding more work and better results.
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A New Push for Smartphone Trade-Ins
Specifically, every current employee that I asked said that the current focus is smartphone and technology trade-ins, and the policy is being heavily enforced by newly-hired management. “Many of us lost bosses and peers and had them replaced with more competitive and less empathetic leadership,” said one manager — we’ll call him Peter — who has been with the company for 14 years. [poilib element=”quoteBox” parameters=”excerpt=%22Many%20of%20us%20lost%20bosses%20and%20peers%20and%20had%20them%20replaced%20with%20more%20competitive%20and%20less%20empathetic%20leadership%22″]
This focus is obvious from a consumer standpoint. I recently called my local GameStop and was greeted with, “this is GameStop, where we give you cash for your old smartphones. How can I help you?” The smartphone trade offer is also prominently featured on GameStop’s trade offers page.
Employees said they face extreme pressure to meet specific goals for smartphone trade-ins. The goals I heard varied from getting seven trade-ins throughout the week to five to 10 trade-ins on a single Saturday, depending on the store.
One employee who left GameStop recently said they were told their store wasn’t meeting those goals, so their store manager received coaching from the regional manager. Employees heard that their store manager’s job was at risk if the coaching did not lead to a rise in trade-in numbers. These stories have trickled down through more than one GameStop location, with Natalie telling me, “we heard about someone getting fired for not getting enough phone trades.”
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The pressure to convince people to trade in their phones has made some employees uncomfortable. “The tactics, especially the tech trades and PowerUp rewards memberships, feel like we’re shoving it down people’s throats,” one employee we’ll call Jack said. [poilib element=”quoteBox” parameters=”excerpt=%22The%20tactics%2C%20especially%20the%20tech%20trades%20and%20PowerUp%20rewards%20memberships%2C%20feel%20like%20we’re%20shoving%20it%20down%20people’s%20throats%22″]
There’s also a general skepticism around its effectiveness. “It’s not [working], at least in my district,” one long-time employee said, who we’ll call Victor. “Most of us are really struggling to get trades in.”
Victor told me that an assistant store leader bragged about trading in their own phone in order to reach the required number of tech trades for the week. “It’s actually quite sad,” he said.
Many employees said that a sudden laser-pointed focus from upper management is merely history repeating. “Our very big, ‘nothing-else-matters’ focuses come and go every year,” Peter said, “sometimes even more frequently than that.” Those who shop at GameStop are probably familiar with store associates constantly pushing preorders, upgrades, Pro memberships, Game Informer subscriptions, and so on. The tech trade initiative is simply the latest thing, another means towards raking in instant, unsustainable short-term profit.
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Where Do Employees Think GameStop is Heading?
Employees I spoke to generally don’t feel great about the future of GameStop. Throughout our interviews, they frequently referenced retailers that are long-gone, like Radio Shack, Hollywood Video, and, of course, Blockbuster.
“Let’s look at Blockbuster and Hollywood Video, for example,” Jack said. “Good things don’t last forever, and those two companies are just prime examples of what happens when the times change.”
“Corporate is clearly struggling against digital game sales, and I’ve seen it firsthand in the store,” Victor said. “[GameStop] is clearly on its way out, down a painful route.”
It’s not all doom and gloom. Many feel the impending release of the PlayStation 5 and Xbox Series X this holiday season could turn GameStop’s successes around.
“[The next-gen launch] is very important due to the fact that profit has been on the steady decline since the holiday boom ended, and the ‘dry season’ begins until August or September,” Victor said. “I’m sure they’re hoping it’ll stabilize what is clearly turning into a turbulent year. “
Other employees don’t think next-gen is the only life raft for GameStop, citing the upcoming experimental social stores in its long-term survival plans.
“I wish they would set up more stores like that sooner,” one employee, who we can call Sally, said. “At least at my store, we get a handful of regulars that just kind of hang out in the store for an hour or two. So it’d be nice for them to have something to do.”
That GameStop is experimenting with new ideas instead of retreading old ground was generally embraced among the employees I spoke to. “I think a lot comes down to ability and willingness to evolve,” Sandra said. “We have a new CEO who is more aggressive than any of the leadership for the past decade-plus has been. They’re examining every inch of the business and making hard decisions. I think he has a vision in mind.”
Sandra added that the company has a leadership meeting in a few months, where she anticipates the mindset and goals will become clearer.
And despite the uncertain future, many employees I spoke to stressed how much they still love working with their teams, and are ready to face the future of GameStop together.
“I love working at GameStop, I love my team and the regulars especially,” Jack said. “I’ve wanted to work at GameStop since I was 15 years old when we used to do midnight launches for the new Call of Duty. What I don’t love is corporate.”
Reached for comment on this story, GameStop’s corporate office provided the following statement:
“GameStop has and will always be committed to delivering an amazing end-to-end customer experience, which we deliver through over 40,000 passionate store associates and leaders worldwide and some of the best exclusive product offerings in the video game and pop culture arenas. As the video game industry is evolving, so are we. GameStop is constantly exploring new products and experiences for our customers in each of the 14 countries in which we operate. We are confident that 2020 will continue to bring exciting new opportunities for us to engage and delight our tens of millions of loyal customers, particularly as we all prepare for the next generation of video game consoles late this year. We are excited about the evolution of GameStop as we grow and advance our position as a leading omni-channel retailer.”
Note: Portions of these interviews were edited for clarity and to maintain employee anonymity.