Hasbro Announces Workforce Reductions Amid Challenging Toy Sales

Toy company Hasbro experienced a decline of 3.9% in its stock shares during Tuesday's trading session. The decrease came after the company revealed plans to cut approximately 20% of its workforce due to underwhelming sales of toys and games leading up to the holiday season.

Hasbro's competitor, Mattel, also saw a decrease in its stock shares by 2.9%.

CEO Chris Cocks highlighted the disappointing toy sales during the first three quarters of 2023, which have fallen from the peak levels observed during the pandemic and are expected to continue throughout 2024. Hasbro had already laid off around 800 employees earlier this year.

In response to the challenges faced, Cocks shared Hasbro's strategy of focusing on developing fewer, but stronger and more successful brands. The company has taken steps to revamp its supply chain, enhance inventory management, reduce costs, and reinvest over $200 million into the business.

However, despite these efforts, the market conditions have proven to be even tougher and more enduring than anticipated. Cocks acknowledged the need for further action in light of the current environment while expressing confidence in Hasbro's future prospects.

Hasbro Announces Job Cuts and Office Closure Plans

Hasbro, the renowned company behind popular brands such as Nerf, Play-Doh, Power Rangers, and Dungeons & Dragons, has revealed its anticipation of a significant drop in sales. Originally projecting a decline of 3% to 5% for the year, the company now expects a much harsher decrease of up to 15%. This news came as Hasbro reported its fourth consecutive quarterly loss, with a notable 10% reduction in third-quarter sales.

In light of these challenging circumstances, Brian Cocks, the CEO, has made the difficult decision to implement job cuts. Some employees have already been informed or will be notified within the next 24 hours, while the majority will receive their notifications over the course of the next six months. Cocks stated that the purpose of this early announcement is to provide affected employees with sufficient time to process and plan for these changes. In addition, the affected employees will receive comprehensive packages, which include job placement support.

As part of its efforts to streamline operations and reduce costs, Hasbro is planning to exit its offices in Providence, R.I., when the lease ends in January 2025. This move aims to optimize resources while enabling the company to redirect its focus towards investing in new systems, insights and analytics, product development, and digital transformation. Simultaneously, Hasbro remains committed to strengthening its leading franchises and ensuring robust marketing strategies for its brands to thrive in the future.

At the end of 2022, Hasbro had around 6,500 employees. The company's management is taking a strategic approach to adapt to market challenges and seize opportunities for long-term success.