Hasbro is the latest company to announce a round of layoffs as businesses from various industries are wrestling with changing economic conditions.
The toy company said on Thursday it would slash 15% of its workforce worldwide as layoffs reach beyond the tech sector.
Hasbro explained it will start laying off around 1,000 positions next week as the company looks to save $250 million to $300 million annually by 2025.
“Despite strong growth in Wizards of the Coast and Digital Gaming, Hasbro Pulse, and our licensing business, our Consumer Products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” Chris Cocks, Hasbro CEO, suggested in a press release.
The Rhode Island-based company reported preliminary fourth-quarter results, which showed a 17% year-over-year drop in sales to $1.68 billion. The company issued weak earnings guidance, well below consensus estimates, causing an 8% share price drop on Friday.
In addition to the layoffs, the company will introduce a new organizational model, commercial alignment, and leadership changes that it will discuss in more detail on its upcoming earnings call, scheduled for February 16.
Hasbro also announced that Eric Nyman, COO and president, is leaving the company.
“The elimination of these positions will impact many loyal Hasbro employees, and we do not undertake this process lightly. However, the changes are necessary to return our business to a competitive, industry-leading position and to provide the foundation for future success,” Cocks explained.
“We are focused on implementing transformational changes aimed at substantially reducing costs and increasing our growth rates and profitability,” he added.
Hasbro’s consumer-products business struggled in the fourth quarter due to a problematic holiday spending period. Recession fears, inflation, and a cutback in discretionary spending weighed on the company’s results, according to The Wall Street Journal.
Hasbro joins a growing list of companies announcing a significant round of job cuts, including Amazon, Salesforce, Microsoft, Spotify, Salesforce, Alphabet, and IBM.
