Hasbro to Lay Off Almost 20% of Workforce Amid Lackluster Sales
Toy-and-game maker Hasbro announced on Monday that it will be laying off almost 20% of its workforce due to lackluster sales during the crucial holiday shopping season. The decision is part of a strategic transformation plan that was previously communicated by the company.
Hasbro CEO Chris Cocks informed employees of the layoffs in a memo shared with CBS MoneyWatch. He stated, "Today we're announcing additional headcount reductions, affecting approximately 1,100 colleagues globally in addition to the roughly 800 reductions already taken."
The majority of the impacted employees will be notified within a day, and the reductions will take place over the next six months. As part of the cost-cutting measures, Hasbro will not be renewing its lease on its office in Providence, Rhode Island. Workers from that office are expected to transition to the company's headquarters in Pawtucket, Rhode Island.
Hasbro's decision comes after experiencing softer-than-anticipated toy sales in the first nine months of 2023. The company expects the difficulties to continue into the following year. Hasbro is known for producing popular toys and games such as Monopoly, Dungeons & Dragons, and Play-Doh.
Morgan Stanley, in a recent research note, highlighted that inflation and the resumption of student-loan payments have been impacting households' disposable income, which could be contributing to sluggish holiday retail sales.
"We are anticipating weaker results in industries focused on goods," stated Michelle Weaver, U.S. equity strategist. She also mentioned that airlines are the exception, as consumers continue to prioritize holiday travel.
In October, Hasbro reported its fourth consecutive quarterly loss, with a 10% decline in third-quarter sales.
On the other hand, competitor Mattel has performed better due to the success of the "Barbie" film, which features their most popular product.
After the market closed, Hasbro's shares dropped by 6%.
