Mass layoffs at a toy store on Christmas Eve. Hasbro's “strategic transformation” will involve much larger staff cuts than originally planned, the company has told the U.S. Securities and Exchange Commission (SEC). The company announced job cuts of 1,000 employees at the beginning of the year and laid off around 800 of them. However, it has now informed the workforce that it will cut a further 1,100 jobs. In total, the adjustment affects 29% of employees at the seller of Peppa Pig and Transformers products, as well as games such as Monopoly and Dungeons and Dragons.
Company executives conducted an initial strategic review in October 2022. They then announced an “Operational Excellence” program to reduce costs, redesign the supply chain, and several other restructuring measures to drive growth and improve profitability. Value for shareholders. As part of this, Hasbro announced its intention to eliminate approximately 1,000 jobs from its global workforce, representing approximately 15%.
This week, following a new analysis of the company's cost structure and organizational design, managers decided to outsource some corporate functions and make significant staff cuts. “Changes in the company's organizational structure will lead to personnel and resource reallocations, which include the voluntary early retirement of certain groups of employees and further involuntary staff reductions,” explains the company, which has 900 positions. Further jobs are to be cut in the next 18 to 24 months. Since the company closed in 2022 with 6,490 employees, the 1,900 job cuts represent just over 29% of the total.
CEO Chris Cocks has sent a message to employees explaining the new layoffs. “The market headwinds we expected have proven to be stronger and more persistent than expected. “While we are confident in Hasbro's future, the current environment requires us to do more, even though these decisions are among the most difficult we will have to make,” he says.
The company presents the numbers to the workforce in a different way. He points out that 800 jobs have already been cut and therefore announces the layoffs of around 1,100 more employees. In any case, the total number is around 1,900. “Our management team made this difficult decision after much consideration. We recognize that this is difficult news that impacts the livelihoods of our friends and colleagues. Our goal is to communicate transparently with each of you and support you during this time of change,” says the message to all company employees.
In it, the company explains that many of the affected people have been or will be informed in the next 24 hours, although the timelines will vary depending on the country, in accordance with local regulations and, if necessary, after consultation with employees. “I know this news is especially difficult during the holidays,” Cocks admits. “We decided to communicate it now so that people have time to plan and process the changes,” he explains.
The company has already spent $94 million on severance, stock compensation and employee benefits in the first round of adjustments and expects to add another $40 million in the second round. Hasbro estimates that the new adjustment will save it about $100 million in annual gross costs. This increases the total savings from the Operational Excellence Plan for 2025 to 350-400 million, compared to the previous estimate of 250-300 million.
The company has focused on the digital game and the most relevant brands it licenses, but the transition is difficult and the results are not successful. In the first nine months of the current financial year, sales fell by 11% to 3,714 million dollars (around 3,450 million euros at the current exchange rate). The company suffered a loss of $428 million, compared to a profit of $332 million in the corresponding period last year.
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