GameStop profitable for the first time in years

GameStop made money in the last quarter of 2022, something it hasn’t done in years. On Wednesday, the unexpected financial results of GameStop were published. The company reported a profit of $48.2million. GameStop lost $147.5 million during the same period last year, for reference — but, ironically, made more sales during that time. GameStop managed to make profit this quarter despite having fewer sales. It has ExtremelyAccording to GameStop employees, cutting costs can sometimes be detrimental for its workers. Polygon interviewed GameStop staff.

“GameStop is a much healthier business today than it was in the start of 2021,” CEO Matt Furlong, who made nearly $17 million (roughy ¹⁄₃ of Q4’s 2022 profit) in 2021. GameStop shares surged by 35% following Wednesday’s shocking profit report.

Furlong credited GameStop’s profitability to its growing collectibles business alongside improvements to its online storefront and shipping capabilities. But the profit is more likely tied to GameStop’s massive drop in operating costs due to layoffs, store closures, and reduced hours for employees.

“This pivot obviously included headcount reductions as we streamlined operations and cultivated a fast-paced, intense operating environment gearing toward cost containment, efficiency, and profitability,” Furlong said. Furlong expects to continue to “aggressively cut costs” into 2023 and beyond. Europe, in particular, is one market where GameStop plans to cut costs; Furlong said the company has already started to “wind down” business in some countries.

Workers told Polygon in February that one of these cost-cutting measures is forcing stores into single coverage — meaning one person working at a store at a time. It’s created an environment that people call “dangerous” and exhausting; not only is there an increased risk for robberies, but Game Stop employees report being unable to step away for breaks and struggling to manage customers in-store and answer phone calls. According to them, employees are worn down from the constant demoralizing corporate decision making.

GameStop may have been profitable last quarter, but there’s a limit for how much cost-cutting the company’s employees will endure.