Toymaker Hasbro-the company behind popular toys, such as Play-Doh and Monopoly-announced another mass layoff that will affect thousands of employees.
The American multinational toy manufacturer already terminated around 800 of its workers recently. Sadly, Hasbro plans to lay off over 1,000 staff, which is almost 20% of its entire available workforce.
Hasbro toys are displayed at a Target store on February 08, 2019 in San Rafael, California. Hasbro reported fourth quarter earnings that fell short of analyst expectations with earnings of $1.33 per share, far lower than the expected $1.68 per share.
Hasbro CEO Chris Cocks confirmed this decision via a memo to its employees. The announcement was made just two weeks before Christmas.
Toymaker Hasbro Announces New Mass Layoff Affected 20% of Workforce
The latest mass layoff of Hasbro is heartbreaking for 1,100 employees who will be terminated just before Christmas and New Year celebrations. But, the toymaker said that although it is stressful to conduct, it is their last resort.
This is because Hasbro is facing serious sales challenges during the holiday trading season. Chris Cocks explained that the latest mass termination is a "lever" they need to pull to keep the company healthy.
During the first three quarters of 2023, the American toymaker endured tough challenges when it comes to sales. Although this is the case, the CEO is still quite optimistic regarding the company's future.
"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," said Cocks via The Guardian.
"I know this news is especially difficult during the holiday season," he added.
The Hasbro leader further stated that nothing can sugar-coat the difficulties that the mass layoff will create among affected workers.
Chris Cocks said explained that although the toymaker made some important progress across its business, the headwinds they saw during the first nine months of 2023 are expected to last into the holiday or into 2024 in a worst-case scenario.
When Will Affected Hasbro Employees Be Terminated?
The Hasbro logo is displayed on Marvel Iron Man toys at a Target store on July 23, 2018 in San Rafael, California. Hasbro Inc. reported better than expected second-quarter revenue of $904.5 million compared to $972.5 million in the previous year. Despite the loss, revenues were well above analyst expectations sending stocks higher.
According to CNN's latest report, some Hasbro employees included in the mass layoff are expected to be notified before the second week of December ends.
Meanwhile, others will be informed over the next six months. As of writing, Hasbro had 6,300 employees before the recent layoffs and the latest terminations.
These layoffs were already predicted by Hasbro. In the recent earnings call, the company's Chief Financial Officer Gina Goetter warned that they are seeing wider toy category declines.
On the other hand, other toymakers have experienced the opposite, especially Hasbro's competitor Mattel, which recently benefited from the success of the "Barbie" movie.
Although this is the case, Hasbro is still expecting its toy sales to bounce back in the upcoming months of 2024.
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