Dive Brief:
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Hasbro on Monday announced further jobs cuts, affecting about 1,100 employees globally, according to a memo to employees from CEO Chris Cocks that was filed with the Securities and Exchange Commission.
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Over the next 18 to 24 months, Hasbro will eliminate 900 jobs, through voluntary early retirement as well as layoffs, according to the filing. Another 200 is carried over from the company’s earlier plans for 1,000 job cuts, announced in January. Those layoffs were part of a turnaround unveiled last year.
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The company estimates the 900 additional cuts will deliver about $100 million in gross annual run-rate cost savings, growing to gross annual run-rate cost savings of some $350 million to $400 million by the end of 2025, per the filing. That’s up from its previous estimate of $250 million to $300 million.
Dive Insight:
While rival Mattel continues to bask in a glow cast by its “Barbie” movie, Hasbro has been struggling to regain its footing. Both toy giants are facing weak toy demand this season, according to analysts at Bank of America.
Hasbro started off the new year “expecting a year of change including significant updates to our leadership team, structure, and scope of operations,” Cocks said. The first three quarters of the year were expected to be challenging, especially as toy demand settles down from its pandemic-era highs, he said.
But the challenges haven’t let up, despite the traditional seasonal boost for the category.
“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,” Cocks said.
In Q3, revenue at Hasbro fell 10% to $1.5 billion, as growth in its digital gaming segment failed to offset an 18% drop in consumer products and a 42% plunge in entertainment, mostly due to the writer and actor strikes. The company swung to a $171.1 million loss, from $129.2 million in net earnings in the same period last year.
Following that report, and as toy demand remained weak, the company in December began a further review of its cost structure and organizational design, per its SEC filing. The revised structure will entail farming out some corporate functions to third-party providers, the company said.
