Not long after letting go of roughly 800 employees, a well-known worldwide toymaker has revealed yet more layoffs. It has been claimed that Hasbro intends to lay off approximately 1,100 workers, or 20% of its current staff.
The anticipated cuts were disclosed by Hasbro CEO Chris Cocks in a regulatory filing on December 11, according to The Washington Post. Layoffs would allegedly take place over the course of 18 to 24 months, rather than all at once, according to the CEO. Spending reductions of about $300 million per year for the next two years are the company’s top priority.
In the same document, Cocks also commented on what caused the cuts. Following “historic, pandemic-driven highs” last year, toy sales were anticipated to climb this year, but instead experienced a significant decline. Even with the approaching holiday season—usually a windfall for toymakers—the losses could not be reversed.
S&P Capital IQ data shows that Hasbro’s financial situation has been rather unstable in recent years. Even though the toymaker’s revenue spiked by 51% in early 2020, it was followed by a rapidly increasing slump. In comparison to the same period in 2023, the company’s quarterly sales had plummeted by 10% by the third quarter of 2023.
The toy industry giant Hasbro is the one dealing with these massive layoffs. Nerf, My Little Pony, Monopoly, Play-Doh, Dungeons & Dragons, and a slew of other well-known brands are owned by one umbrella firm. The impact of the reduction on individual brands was unclear at the time.
As a result of the economic downturn, customers are cutting back on spending, which is contributing to the problem. The rising cost of housing, food, and utilities has left many Americans with less disposable income to spend on the holidays.
The annual reported income of toy manufacturers is sometimes boosted by the pre-Christmas rush. Companies like Hasbro are especially vulnerable to failures during this time, and the problem is made worse by the fact that it happens year after year.