Hasbro is expected to lay off approximately 20% of its workforce amid a slump in toy sales.
The Rhode Island-based toymaker announced Monday that it would be cutting about 1,100 global jobs or roughly one-fifth of its workforce due to declining product sales and a lull in the toy business, according to a memo to employees, as reported by The Wall Street Journal.
This new round of layoffs comes just before the Christmas holidays. It follows a previous round of job cuts that saw Hasbro reduce its headcount by about 1,000 employees, per The Associated Press.
Despite an extensive portfolio of iconic brands, including Magic: The Gathering, Dungeons & Dragons, NERF, Power Rangers, Transformers, Play-Doh, and Peppa Pig, Hasbro has found it increasingly difficult to compete amid the pullback in consumer spending.
Although consumers spend less on toys, Hasbro saw a 40% revenue growth in Wizards of the Coast and Digital Gaming segment behind the strong launch of Baldur’s Gate III.
Hasbro has had to lower its forward guidance after posting its fourth consecutive quarterly loss. According to the company’s third-quarter financial results, the company is currently anticipating total revenue to drop by 13% to 15% in 2023 instead of the company’s previous forecast of 3% to 6%.
“The market headwinds we anticipated have proven to be stronger and more persistent than planned,” Hasbro CEO Chris Cocks wrote in the memo, per the WSJ. “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 the holiday and are likely to persist into 2024.”
Although the toy industry faces declining consumer interest, Hasbro competitor Mattel saw a significant boost in revenue in 2023 because of the widespread success of the Barbie Movie, which has earned $1.44 billion globally since its release over the summer.
Hasbro’s decision to lay off 20% of its workforce before the Christmas holiday was difficult, considering the timing of the layoffs and the fact it’s hitting the toy industry.
