The Hasbro toy company has announced the layoff of approximately 15% of its global workforce.
The company hopes that cutting those 1,000 jobs will help it meet its goal of saving between $250 million and $300 million in costs by the end of 2025 that it announced in October last year.
According to the company, the changes will include a new organizational model, business alignment and leadership changes, which it will discuss in more detail on its upcoming earnings conference call.
Staff cuts will begin in the coming weeks.
With these measures, along with ongoing investments in systems and in the supply chain, the company says it is on track to achieve that goal of cost savings to drive profitability and reinvestment in the growth of the core brand.
“The removal of these positions will affect many loyal Hasbro employees, and we do not undertake this process lightly.
However, changes are necessary to return our business to a leading and competitive position in the industry and to lay the foundation for future success," CEO Chris Cocks said in a statement.
As part of the management changes, the toymaker has announced that, as part of these organizational and business changes, Eric Nyman, president and COO, is leaving the company.
The consumer products business, which markets games and toys like My Little Pony, Furby and Monopoly, will report directly to Cocks.
The company has been turning to digital gaming and the most relevant brands it is licensed to, but the transition has been painful.
In the Christmas quarter, sales in the consumer products area suffered, with a 26% drop.
The entertainment business did not do well either, whose turnover fell by 12%.
On the other hand, in the digital game division and in the Wizards of the Coast franchise (which sells role-playing games such as Dungeons & Dragons in different formats) sales grew by 22%. The consumer products business continues to be the most important, so overall the turnover fell by 17%, to 1,680 million dollars, according to the preview of results published this Thursday.
This drop in sales and the provisions to reorganize the business have caused the company to enter losses in the fourth quarter, although it has closed the year with benefits.
The company will detail its results on February 16.
“While fiscal year 2022, and particularly the fourth quarter, represented a difficult time for Hasbro, we are confident in our Blueprint 2.0 strategy, introduced in October, which includes focusing on fewer and larger brands, gaming, digital, and our fast-growing direct-to-consumer and licensing businesses,” said Cocks.
The layoffs announced this week by 3M, Dow Chemical, Hasbro and other companies are a sign that the consequences of uncertain economic conditions and fears of a recession are having an impact beyond technology.
The largest layoff announcements have been concentrated in the latter, but after a hiring binge with which companies doubled their workforce in the last five years.
“We appreciate Eric's dedication to Hasbro over the past 18 years and the leadership he has provided.
On behalf of all of us at Hasbro, we wish him the best in his future endeavors," said Cocks.