Hasbro to Eliminate 1,110 Jobs Amid Weak Sales
The toymaker Hasbro, known for popular brands like Peppa Pig, Transformers, and Magic: The Gathering, has announced plans to cut approximately 1,110 jobs, which accounts for nearly 17 percent of its workforce. The decision comes as the company continues to face challenges due to weak sales during the critical holiday shopping season.
Market Headwinds and Persistent Challenges
In a memo to staff, Hasbro’s CEO, Chris Cocks, acknowledged that the anticipated market headwinds have proven to be stronger and more persistent than initially planned. The company had already reduced its workforce by 800 jobs earlier this year. The majority of the latest job cuts are expected to occur over the next six months, with the remainder taking place within the next year.
Mr. Cocks stated, “We anticipated the first three quarters to be challenging, particularly in toys, where the market is coming off historic, pandemic-driven highs. 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.”
Impact on Financial Outlook and Stock Performance
In its third-quarter earnings report, Hasbro had already indicated that softer toy sales would negatively affect its outlook. The company projected an overall revenue decline of approximately 13 to 15 percent for the year. Following the announcement of job cuts, Hasbro’s stock experienced a decline of about 5.7 percent in after-hours trading. Over the past year, the stock has dropped nearly 19 percent, closing at $48.89 on Monday.
Exploring Options to Reduce Real Estate Footprint
In addition to job cuts, Hasbro is actively exploring options to reduce its real estate footprint. The company plans to close its Providence, R.I., office after the lease expires in January 2025.
Despite the challenges faced by Hasbro, the company remains committed to navigating the market conditions and finding ways to adapt to the evolving toy industry.
