(WatchDogReport.org) – Toy and gaming giant Hasbro announced recently that it was starting to slash jobs. On December 11th, they cut 800, blaming sluggish holiday sales. The manufacturer behind popular brands such as Play-Doh and Monopoly will cut about 20 percent of its workforce due to the challenging market, according to a memo from CEO Chris Cocks. He acknowledged the unexpected and persistent market challenges, saying, “The market headwinds were stronger than planned.”
The company anticipated difficulties in the first three quarters as consumer spending habits shifted after the pandemic, but these conditions extended into the holiday season and are likely to continue into 2024. The layoffs, revealed by The Wall Street Journal, come almost a year after Hasbro began cutting 15 percent of its global staff to reduce costs, aiming to save up to $300 million in the next few years.
As per a regulatory filing, Hasbro had a workforce of approximately 6,490 globally by the end of 2022. With the recent job reductions revealed on December 11th, the total layoffs have now reached 1,900, accounting for around 29% of its employees worldwide.
Hasbro’s CEO mentioned that the company faced post-pandemic challenges. Sales declined as parents, who stocked up on toys during lockdowns, scaled back purchases. Analysts anticipate a 19% sales drop this quarter. Consequently, Hasbro’s shares fell about 8.7% in extended trading.
Global consumers have faced challenges dealing with enduringly elevated inflation, leading them to reduce non-essential expenditures like toys and prioritize purchasing essential items.
The layoffs are expected to save $100 million annually, but the company foresees approximately $134 million in associated costs like severance. Hasbro plans to not renew an office lease in Rhode Island and will relocate affected employees to its nearby headquarters.
To adapt to industry shifts, Hasbro and competitor Mattel Inc. are transforming toy brands like Dungeons & Dragons and Barbie into entertainment franchises for the big screen. Despite these challenges, Hasbro adjusted its annual revenue forecast in October due to a softer toy market ahead of the holiday season.
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