October 4, 2023

GameStoppin': When Billionaire CEO’s Budgeting Email Backfires

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GameStoppin': When Billionaire CEO’s Budgeting Email Backfires

By Nick | October 4, 2023

In a move that seems straight out of a misguided leadership handbook, the newly crowned billionaire CEO of GameStop, Ryan Cohen, recently emailed all staff urging them to "treat company dollars like it was their own and lead by example."

While this might seem like a noble call to fiscal responsibility, it has yet to land as intended with the masses or the gaming community.

From billionaire CEO advice to employee spending habits, discover the latest in the GameStop saga

Not long after the digital ink dried on Mr. Cohen’s email, the gaming community was awash with ridicule, irony, and a sprinkle of sarcasm. Many wondered aloud, mostly on social media platforms, how employees, some of whom struggle to make ends meet, might emulate the spending habits of a billionaire. “Do I get to buy a yacht when we hit our monthly sales target?” one GameStop employee humorously quipped on Twitter.

While the CEO's intent might have been to promote financial responsibility, the optics of a billionaire asking his often underpaid staff to further pinch pennies for the company's cause wasn’t lost on the masses. "It's like asking a fish to climb a tree and then saying, 'Look, I can do it because I live in a treehouse!'” remarked another user, clearly enjoying the rich material Mr. Cohen had unwittingly provided.

For those who may have missed the memo on GameStop, here's a brief company history: GameStop, the brick-and-mortar bastion of video games, once faced the brink of irrelevance in an increasingly digital age. Struggles with adapting to new trends and battling digital storefronts led to store closures and dwindling stock prices.

Then, in what can be best described as a financial phoenix moment, GameStop's stock surged earlier this year, thanks in no small part to a merry band of Reddit users. The company has since been on a mission to reinvent itself, bolstered by fresh funds and an invigorated (if somewhat bewildered) investor base.

Here's the full email:

I will be straight to the point.

It is not sustainable for GameStop to operate a money losing business. The mission is to operate hyper efficiently and profitably. Our expense structure must allow us to endure any adverse scenario. Whether it’s a difficult economy or revenue deceleration from shrinking software, we must be profitable. Our job is to make sure GameStop is here for decades to come. Extreme frugality is required. Every expense at the company must be scrutinized under a microscope and all waste eliminated. The company has no use for delegators and money wasters. I expect everyone to treat company money like their own and lead by example.

Prospering in retail means survival. If we survive, we stay in the game. Survival is avoiding the deadly sins that often lead retailers to self-destruct. This is usually a result of the following - buying bad inventory, using leverage, and running expenses too high. By avoiding these self-inflicted mistakes and focusing on the basics, GameStop can be here for a long time.

I expect everyone to roll up their sleeves and work hard. I’m not getting paid, so I’m either going down with the ship or turning the company around. I much prefer the latter.

It won’t be easy. Best of luck to us all.

Ryan

Returning to our current billionaire brouhaha, however, one can't help but wonder if this email gaffe will be a mere blip in GameStop's roller-coaster story, or if it might signal the start of another challenging chapter. Only time will tell.

In the meantime, we hope Mr. Cohen might consider treating his employees like they were his own family, leading by example in more ways than just fiscal prudence.

For more insights into the gaming industry, check out this external analysis.


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