Hasbro is slashing nearly 20% of its workforce amid an ongoing slump in toy sales.
Hasbro CEO Chris Cocks announced layoffs for 1,100 workers in a Monday memo to employees, cuts which come in addition to the roughly 800 jobs eliminated earlier this year.
Cocks said the decision to reduce Hasbro’s workforce was made in light of market headwinds proving to be “stronger and more persistent than planned.”
“We anticipated the first three quarters to be challenging, particularly in toys, where the market is coming off historic, pandemic-driven highs,” Cocks said. “While we have made some important progress across our organization, the headwinds we saw through the first nine months of the year have continued into Holiday and are likely to persist into 2024.”
Some Hasbro employees will find out whether their job has been eliminated this week, while the rest of the layoffs will happen over the next six months, Cocks said in the memo.
Hasbro, known for making toys such as Transformers and Play-Doh, and games like “Magic: The Gathering” and “Dungeons & Dragons,” had 6,300 employees prior to the layoffs, according to its website.
Shares of Hasbro fell more than 4% in after-hours trading on Monday.
Layoffs at the toy company come after Hasbro cut its full-year revenue guidance in October — just before the holiday season, which is usually the strongest sales period for toy makers. On the company’s earnings call, Hasbro’s Chief Financial Officer Gina Goetter warned that the company was seeing “broader toy category declines.”
However, not all toymakers are expecting weakness this holiday season. One of Hasbro’s competitors, Mattel, said in its most recent earnings that it benefited from the success of the “Barbie” movie and the company “expects to gain market share in the fourth quarter and full year.”
“Barbie” became the highest-grossing movie at the domestic box office a few weeks after it hit theaters this summer, raking in more than $1 billion. “Barbie” is distributed by CNN’s parent company, Warner Bros. Discovery.
Layoffs are not the only cost-cutting move Hasbro is undertaking: In August, the company announced it would sell its eOne film and TV business to Lionsgate for approximately $500 million.
The company will also reduce its office footprint, exiting its Providence, Rhode Island, space at the end of its lease term in January 2025, according to Monday’s memo.
