GameStop’s survival demands ‘extreme frugality,’ CEO Ryan Cohen tells employees

Just hours after being named GameStop‘s CEO, Ryan Cohen sent out a memo to employees on Thursday that emphasized he will take dramatic steps to ensure the struggling video game retailer survives.

“Our job is to make sure GameStop is here for decades to come,” he wrote in the email that was sent to corporate employees and store leaders and obtained by CNBC. “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.”

Cohen, a billionaire activist investor and founder of direct-to-consumer pet food and supply retailer Chewy, was named the company’s new leader on Thursday morning. He was previously executive chairman of GameStop. As of late June, his firm RC Ventures was the company’s largest shareholder with a 12.09% stake, according to FactSet.

Cohen got the top job nearly four months after GameStop fired CEO Matthew Furlong. Cohen will not receive a salary in his new role.

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Read the full memo below:

Subject: Survival
 
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

This story is developing. Please check back for updates.

— CNBC’s Gabrielle Fonrouge contributed to this report.