Oftentimes, the news surrounding GameStop (NYSE:GME) is about the meme stock trade. Today, however, the buzz is all about GameStop layoffs. GME stock is down today as the company’s workforce reduction raises concerns about its foray into cryptocurrency and the blockchain.
It seems like every week in late 2022, there’s another well-known company joining the “layoff club.” Typically, it’s a technology-related business that’s sending workers home (if they weren’t already working from home, that is).
GameStop was already a member of this club, but it reaffirmed its membership recently by reportedly implementing another round of layoffs. Axios broke this news story, citing “a source familiar with the matter and multiple LinkedIn posts from people claiming to be impacted.”
Interestingly, some tech stocks have actually gone up after a layoff announcement. That’s because a workforce reduction can help a company reduce its expenditures. So, how did the GameStop share price move after the opening bell rang today?
How Are the GameStop Layoffs Affecting GME Stock?
All of the major stock market indices were in the red this morning. However, GME stock was down more than the indices and traded 4% to 5% in the red during the first hour.
Clearly, the market isn’t enamored with GameStop’s job cuts. Possibly, that’s because GameStop a number of headcount reductions will reportedly affect the company’s cryptocurrency/blockchain engineers.
Per Axios, a source within the company revealed that the “team building GameStop’s blockchain wallet was heavily impacted.” Additionally, a LinkedIn post from a software engineer at GameStop apparently claimed: “Another big round of layoffs from GameStop currently in progress… E-commerce Product and Engineers… Lots of them.”
Separately, a GameStop software engineer reportedly posted, “Super sad to say I was apart of the layoffs today at GameStop.” There’s sadness in the financial markets as well, along with some frustration perhaps, as traders consider whether GameStop’s push to innovate in crypto and the blockchain is viable. Suffice it to say, then, that GME stock investors aren’t celebrating the company’s participation in the “layoff club” today.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.