Hasbro Announces Layoffs, Cutting 1,100 Jobs Amid Toy Sales Slump
In response to a persistent decline in toy sales, Hasbro is set to lay off approximately 1,100 employees, representing nearly 20% of its workforce, according to a memo issued by Hasbro CEO Chris Cocks on Monday.
This latest round of job cuts follows the elimination of around 800 positions earlier this year. Cocks attributed the decision to the challenges posed by market headwinds, which proved to be “stronger and more persistent than planned.”
The toy industry, including major players like Hasbro, has faced difficulties, with Cocks noting that the first three quarters of the year were particularly challenging due to a decline in the toy market following pandemic-driven highs. Despite some progress in various aspects of the organization, the adverse conditions are expected to persist into 2024.
Cocks mentioned that some affected employees would be informed of their job status this week, while the remainder of the layoffs would be carried out over the next six months. Hasbro, recognized for iconic toys such as Transformers and Play-Doh, as well as popular games like “Magic: The Gathering” and “Dungeons & Dragons,” had a workforce of 6,300 employees before the layoffs.
Shares of Hasbro experienced a more than 4% drop in after-hours trading following the announcement.
This move follows Hasbro’s decision in October to revise its full-year revenue guidance, just ahead of the crucial holiday season, which typically sees a surge in toy sales. During the earnings call, Hasbro’s Chief Financial Officer Gina Goetter warned of “broader toy category declines.”
While Hasbro faces challenges, not all competitors share the same outlook. Mattel, a key rival, reported benefiting from the success of the “Barbie” movie and expressed expectations of gaining market share in the fourth quarter and the full year.
The decision to downsize the workforce is not the only cost-cutting measure for Hasbro. In August, the company announced the sale of its eOne film and TV business to Lionsgate for approximately $500 million. Additionally, Hasbro plans to reduce its office footprint by exiting its Providence, Rhode Island, space at the end of its lease term in January 2025, as stated in Monday’s memo.
