Shares of toy company Hasbro shed 3.9% in Tuesday trading after it told employees it is cutting nearly 20% of its workers on weak sales of toys and games heading into the holiday sales season.
Shares of rival toy maker
Mattel
are also down 2.9%.
The cuts, about 1,100 jobs, are coming as
Hasbro
CEO Chris Cocks cited weaker-than-expected toy sales through the first three quarters of 2023, down from pandemic-driven highs, that are likely to persist into 2024. Hasbro already cut about 800 jobs earlier this year.
Cocks told employees that as part of the company’s strategy to “focus on building fewer, bigger, better brands” and transforming the company, Hasbro has retooled its supply chain, improved its inventory, reduced costs, and reinvested more than $200 million back into the business.
“But the market headwinds we anticipated have proven to be stronger and more persistent than planned,” Cocks said. “While we’re confident in the future of Hasbro, the current environment demands that we do more.”
Hasbro, which makes Nerf, Play-Doh, Power Rangers, and Dungeons & Dragons brands, said in October that it expected sales to drop up to 15% this year, deeper than its previous estimate calling for a 3% to 5% decline. Hasbro posted its fourth straight quarterly loss and a 10% drop in third-quarter sales.
Cocks said that some employees had already been notified or would be told within 24 hours that their roles were being cut, and that a majority of employees losing their jobs would be notified within the next six months.
He said he decided to announce the job cuts now to give employees time to “plan and process the changes,” and said affected employees would receive comprehensive packages including job placement support.
Pawtucket, R.I.-based Hasbro also plans to exit its offices in Providence, R.I., when the lease ends in January 2025.
“As we uncover more cost savings, we’ll invest in new systems, insights and analytics, product development and digital – all while strengthening our leading franchises and ensuring our brands have the essential marketing they need to thrive well into the future,” Cocks said.
Hasbro employed about 6,500 people at the end of 2022.
Write to Janet H. Cho at [email protected]
Read the full article here
