GameStop Stores To Reopen In Some States But Employees Will Receive A Pay Cut

GameStop (GME) is gearing up to reopen some stores as stay-at-home orders relax during the coronavirus pandemic. The video game retailer has also announced a series of pay cuts for its employees as it looks to curtail costs.

GameStop said it is getting ready to reopen stores in South Carolina and Georgia as well as in Italy, Germany, and Austria. In the coming weeks, GameStop said it plans to open stores in more states and countries. The company’s stores in Australia continue to remain open.

At the height of the coronavirus pandemic, GameStop closed about one-third of its stores, with two-thirds of locations open for curbside pickup. GameStop said it was able to retain 90% of its planned sales volume through the curbside pickup.

“The situation remains very fluid and a great deal of uncertainty remains, however, we entered into this time with a strong balance sheet and believe that we have sufficient cash and liquidity for the foreseeable future and will continue to take all of the necessary steps to ensure GameStop remains a strong and vibrant company at the end of this crisis,” George Sherman, GameStop’s CEO said in a statement.

Effective Sunday, employees at GameStop will receive a reduction in pay between 10% and 30% worldwide. Employees were also given the option to take a furlough or reduce their workweek and pay.

GameStop has also cut Sherman’s salary by 50% with Jim Bell, chief financial officer for the company, taking a 30% reduction as well as the remainder of the executive team. In addition, the board of directors has reduced their cash compensation by 50%.

Other measures that GameStop has taken include reduced inventory and lower capital spending. Lease payments were not made at a portion of properties as GameStop looks to negotiate with its landlords for ongoing rent payments for stores that were closed during the COVID-19 pandemic.

Shares of GameStop stock were up 1.8828% as of 1:55 p.m. EDT on Wednesday.