Hasbro plans to cut 1,100 employees amid low sales

Toymaker giant Hasbro plans to lay off 20% of its employees, citing weak sales so far this year. The plans to let 1,100 employees go follows an earlier reduction in force of 800 workers this year.

The Wall Street Journal says the layoffs are expected to be completed over a number of months, based on an internal memo the Journal viewed. CNN reported that some employees will learn this week if their jobs have been eliminated. Reuters said others would be notified in the next six months, with actual layoffs occurring over the next year.

Per the Journal, Hasbro CEO Chris Cocks said in a memo published in a regulatory filing that “the move was spurred by weaker-than-expected 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.”

“The market headwinds we anticipated have proven to be stronger and more persistent than planned,” Cocks wrote. “While we’re confident in the future of Hasbro, the current environment demands that we do more.”

Hasbro makes Transformers, Monopoly, Dungeons and Dragons, Peppa Pig, Play-Doh, My Little Pony and Marvel action figures, among other toys. Shares were down nearly 1% to $48.46 Tuesday morning on NASDAQ.

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CNN reported that Mattel, a competing toy company, has had a much better year, bolstered by the popularity of the movie “Barbie.”

Hasbro also plans to sell its eOne film and TV business to Lionsgate for $500 million, per CNN. And it will close its Providence, Rhode Island, offices when its lease ends in January 2025, based on Cocks’ memo.

According to The Associated Press, “Like many toy companies, Hasbro is struggling with a slowdown in sales after a surge during pandemic lockdowns when parents were splurging on toys to keep their children busy. Last holiday season, many toy companies had to slash prices to get rid of merchandise due to weak demand. And the challenges have continued. Toy sales in the U.S. were down 8% from January through August, based on Circana’s most recent data.”

According to AP, “Hasbro now expects to deliver gross annual run-rate cost savings of about $350 million to $400 million by the end of 2025, up from its previous estimate of $250 million to $300 million.”