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Hasbro Cutting 1,100 Jobs After Sluggish Toy Sales Persist Into Holidays
CEO Chris Cocks says challenging conditions expected to stretch into next year, prompting another round of layoffs
By Ben Glickman, WSJ
Dec. 11, 2023
Hasbro in October said it expected sales to drop up to 15% this year, after previously forecasting a 3% to 5% decline. PHOTO: JEENAH MOON/BLOOMBERG NEWS
Hasbro HAS 0.39%increase; green up pointing triangle is cutting nearly 20% of its workforce as weak sales for toys and games persist into the critical holiday shopping period.
The maker of Transformers action figures, the Dungeons & Dragons fantasy game and Monopoly will cut about 1,100 jobs, on top of 800 layoffs earlier this year, Chief Executive Chris Cocks said Monday in a memo to employees viewed by The Wall Street Journal. Hasbro reported having about 6,500 employees as of the end of 2022.
Cocks said the move was spurred by weaker-than-expected toy sales through the first nine months of the year, which came after sales hit “historic, pandemic-driven highs.” The challenges have stuck around through the holiday season and are expected to continue into next year, he said.
“The market headwinds we anticipated have proven to be stronger and more persistent than planned,” Cocks said in the memo. “While we’re confident in the future of Hasbro, the current environment demands that we do more.”
The announcement, just two weeks before Christmas, comes as toy companies enter their busiest time of the year. About half of toy companies’ yearly sales come in the weeks leading up to the holiday, according to analysts, making the period a make-or-break stretch for manufacturers.
Early data points to another weak year for the industry following strong sales during the pandemic years. U.S. toy sales were down 8% through September, according to research firm Circana. In November, toy sales fell 10% from a year ago, with a 7% drop in the number of units sold, according to Circana.
Hasbro has been hit hard as shoppers pull back. In October, Hasbro said it expected sales to drop up to 15% this year, after previously forecasting a 3% to 5% decline. The lowered view came as the company posted its fourth-consecutive quarterly loss on a 10% drop in third-quarter sales.
Meanwhile, Barbie-maker Mattel, boosted by the runaway success of the “Barbie” movie, has weathered the toy sales downturn, breaking a sales slump in the latest quarter. The El Segundo, Calif.-based company, which also makes Hot Wheels cars and Polly Pocket toys, expects sales for 2023 to be flat compared with 2022, despite forecasting a decline in the toy industry.
Sales of Barbie toys surged in the third quarter after the Barbie movie roped in over $1.4 billion worldwide at cinemas, according to Box Office Mojo.
Hasbro shares are down 20% this year, while Mattel stock is up 5.4%.
Hasbro unveiled over a year ago that it planned to cut costs across its business to grow its profit. An earlier round of layoffs and the departure of operating chief Eric Nyman followed shortly after.
Cocks has looked to return the storied toy maker to its core toy and game business and appeal to consumers of all ages, including adults. The company in August said it would sell its eOne film and entertainment business to production company Lions Gate Entertainment for about $500 million.
Toy makers have worked to recover as their sales slump after a surge in 2020 and 2021. Hasbro and other toy manufacturers have been plagued by bloated toy inventories and softer demand from inflation-pinched consumers.
Hasbro is the latest company to cut jobs in a push to boost profits. Spotify said last week it was preparing to lay off 17% of its workforce, or about 1,500 employees, in its third round of layoffs this year.
Cocks said in his memo that some employees in roles being cut had already been notified or would be told within 24 hours. He said a majority of employees being let go would be notified in the next six months.
Hasbro also plans to vacate its Providence, R.I., office at the end of the lease in January 2025. Cocks said the building wasn’t currently used at full capacity, and teams would be transferred to its nearby Pawtucket, R.I., headquarters.
Write to Ben Glickman at ben.glickman@wsj.com
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