Hasbro’s Weak Holiday Sales Trigger 15% Headcount Cut

Hasbro is cutting 15% of its workforce after seeing a 17% year-over-year drop in revenue.

The branded entertainment company will eliminate 1,000 positions worldwide this year and has made leadership changes that include President and Chief Operating Officer Eric Nyman leaving the company and the Consumer Products division reporting directly to the CEO, Hasbro said in a Thursday (Jan. 26) press release.

“Despite strong growth in Wizards of the Coast and Digital Gaming, Hasbro Pulse, and our licensing business, our Consumer Products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” Hasbro CEO Chris Cocks said in the release.

During Hasbro’s most recent earnings call, held on Oct. 18, Cocks said the company had seen the average consumer become increasingly price sensitive and promotions become increasingly important.

The company also said at the time that it would focus on fewer, bigger brands, high-profit digital games and its licensing and partner businesses.

“The management team isn’t satisfied with our performance in Q3,” Cocks said during the Oct. 18 call.

As of Friday morning, Hasbro’s stock is down about 28% over the past year, while rival Mattel’s stock is up about 2%. Mattel is to announce its fourth-quarter and full-year results on Feb. 8.

Hasbro’s latest moves came as the company provided an update on fourth-quarter and full-year results ahead of its Feb. 16 release of financial results.

The company’s preliminary full-year 2022 results show that while the revenue of the Wizards of the Coast and Digital Gaming segment was up 3% year-over year, that of Consumer Products was down 10% and that of Entertainment was down 17%.

Together with the layoffs and leadership changes, the company said it will announce a new organizational model and commercial alignment during its Feb. 16 earnings call.

“The elimination of these positions will impact many loyal Hasbro employees, and we do not undertake this process lightly,” Cocks said in the release. “However, the changes are necessary to return our business to a competitive, industry-leading position and to provide the foundation for future success.”

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