Hasbro lays off almost 20% of employees due to weak sales of games and toys – Kommersant
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Game and toy manufacturer Hasbro will cut about 1.1 thousand employees, which is almost 20% of the total number of employees working for the American company worldwide. Hasbro CEO Chris Cox announced the upcoming cuts. letter to employees, the text of which was reviewed by The Wall Street Journal (WSJ).
The decision to cut staff comes as toy sales have been weaker than expected for three straight quarters and the holiday sales period has also fallen short of expectations, according to the letter. If in the middle of the year Hasbro predicted that there would be a 3-5% drop in sales for the entire year, then in October the company revised the forecast and said that it expected a 15% drop in annual sales.
The cuts are to be carried out over the next 18 to 24 months, the letter states. At the beginning of 2023, the company already announced cuts. The talk was about 1 thousand employees; to date, about 800 have been laid off. The cuts should reduce costs, according to management estimates, by $100 million per year. In addition, the company planned to refuse to lease one of the offices from January 2025. And in August, Hasbro management announced that the company intends to return to its core business of producing games and toys, and non-core assets will be sold off. At the same time, it was announced the upcoming sale of eOne’s film and entertainment content production division for $500 million to Lions Gate Entertainment.
Hasbro shares on the Nasdaq exchange reacted to the news with a fall of 5.6%. Since the beginning of the year, the company’s shares have fallen in price by 21%.
Overall, this year has been weak for the games and toys industry in the United States, which experienced a real boom during the pandemic. From the start of the year through September, U.S. sales of such products fell 8% year over year, according to market research firm Circana. In November, the drop was 10% compared to November 2022.
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