Staff have been informed that the Hasbro workforce is expected to be reduced by around 20% in a move described as a ‘last resort’ for the company.
Hasbro is planning to lay off 1,100 employees, citing a continued poor sales performance which has not improved as hoped over the course of the last year. The company says it will be forced to reduce its employee total by almost a fifth, a move which follows the announcement earlier this year of the loss of 800 roles.
CEO Chris Cooks said: “This is a lever we must pull to keep Hasbro healthy”, as challenges which the company faced in the first three quarters of 2023 continued into the fourth. He added: “Market headwinds have proven to be stronger and more persistent than planned.”
“While we’re confident in the future of Hasbro, the current environment demands that we do more, even if these choices are some of the hardest we have to make,” he wrote in an email to staff. “I know this news is especially difficult during the holiday season.”
Hasbro entered 2023 anticipating a year of change, including significant updates to its leadership team, structure and scope of operations. The company’s ongoing slowdown in sales follows a surge during the pandemic when toy sales boomed for a period.
“We anticipated the first three quarters to be challenging, particularly in toys, where the market is coming off historic, pandemic-driven highs,” Chris’s statement went on. “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 holiday and are likely to persist into 2024.”
In October, the company reported that it was positioning to return to profitable growth. A plan for Q4 was shared which intended to drive share over the holiday period and exit the year with clean inventory, a much-improved corporate overhead and a clear runway for introducing new product innovation and market support going forward. Hasbro admitted at the time, though, that toy category declines had changed its ‘total Hasbro outlook’, and Gina Goetter, chief financial officer, said the company would be ‘resetting [its] cost base and removing complexity’.
Hasbro said it was also exploring options to reduce its global real estate footprint. In the US, the company’s Providence, Rhode Island office will close, having been identified as ‘currently not being used to its full capacity’, and remaining staff there will potentially be redeployed to Hasbro’s headquarters in Pawtucket.
Chris Cocks’ email to staff added: “To position Hasbro for growth, we must first make sure our foundation is solid and profitable. To do that, we need to modernize our organization and get even leaner… We decided to communicate now so people have time to plan and process the changes. For those employees affected we are offering comprehensive packages including job placement support to assist in their transition.”
He concluded: “Let’s support each other, and lean in to drive through these necessary changes, so we can return our business to growth and carry out Hasbro’s mission.”