Hasbro, the popular game and toy maker, has recently announced significant layoffs just two weeks before Christmas. The company plans to cut around 1,100 jobs, which, when combined with the 800 layoffs earlier this year, accounts for nearly one-third of its entire workforce. These job cuts come as a blow to the employees and their families during what is traditionally the busiest season for game and toy sales.
According to a memo shared with Polygon, Hasbro CEO Chris Cocks explained that the company had anticipated a challenging year of change, with updates expected to its leadership team, structure, and scope of operations. Cocks mentioned that the first three quarters had been particularly tough for the Toys division, as the market was coming down from pandemic-driven highs. Unfortunately, the difficulties faced in 2023 have extended into the Holiday season and are projected to continue into the following year.
Insiders and investors have been well-aware of the shortcomings in Hasbro’s toy portfolio for some time now. However, the company’s subsidiary, Wizards of the Coast, which publishes popular tabletop games such as Dungeons & Dragons and Magic: The Gathering, has experienced record-breaking levels of revenue and player engagement. Activist hedge fund Alta Fox had previously attempted to push for spinning off Wizards from Hasbro in 2022 but was unsuccessful. Now, with these layoffs, the century-old company is left with the task of rebuilding in 2024.
While Hasbro is cutting jobs, it seems to be turning its attention to the video game sector. Their latest project, Exodus, has garnered attention after its success at The Game Awards. Amidst this shift, Hasbro stock has fallen approximately 20% this year, according to The Wall Street Journal.
Despite the challenging news, long-term investors are expected to continue earning dividends at a rate of 5.8% annually, as reported by Google Finance. Chris Cocks, the Hasbro CEO, received a reported $9.4 million in compensation last year. In comparison, the new price of Hasbro’s Player’s Handbook is around $59.95, roughly equivalent to 156,797 copies.
As Hasbro navigates these changes, the impacted workers from various teams are expected to be contacted by the end of the business day Tuesday. The company has not provided specific details regarding the breakdown of layoffs by geography or teams, citing respect for their employees.
Hasbro remains committed to growth and investment in various areas in 2024, acknowledging that cost-cutting alone is not a sustainable strategy. The company is striving to adapt to the evolving market and ensure its long-term success in the toy and game industry.
In conclusion, Hasbro’s decision to lay off nearly 20% of its workers just before Christmas has sent shockwaves through the industry. The company’s struggle to overcome the challenges faced in the toy market has led to these job cuts. As Hasbro focuses on rebuilding and invests in other areas such as video games, it remains to be seen how these changes will impact the company’s future.
