Toy and entertainment giant Hasbro says it will cut its workforce by 15 percent, or 1,000 employees, in the coming weeks.
The significant layoffs are part of a larger restructuring and cost-saving effort underway, with the company already putting its Entertainment One film and television division up for sale.
“We are focused on implementing transformational changes aimed at substantially lowering costs and increasing our growth rates and profitability,” Hasbro CEO Chris Cocks said in a statement. “While the entire year of 2022, and particularly the fourth quarter, represented a challenging time for Hasbro, we are confident in our Blueprint 2.0 strategy, introduced in October, which includes a focus on fewer, larger brands; gaming; digital; and our rapidly growing direct-to-consumer and licensing businesses.”
In selling eOne, Hasbro articulated a strategy in which it leans on franchise brands like Transformers, Peppa Pig and Dungeons & Dragons, even in entertainment, though it can do without its in-house studio. Hasbro sought the eOne deal in 2019 to turn the toymaker into a media competitor, as it combined the independent studio’s TV and movie unit with its own.
But the pandemic disrupted that media strategy with Hollywood production shutdowns and content delivery delays as the industry reopened.
Hasbro also announced that Hasbro President and COO Eric Nyman would be leaving the company, with a new organizational model to be unveiled in the coming weeks. “The removal of these positions will affect many loyal Hasbro employees, and we do not undertake this process lightly. However, the changes are necessary to return our business to an industry leading and competitive position and to provide the foundation for future success,” added Cocks.
Hasbro posted preliminary earnings, reporting that 2022 revenue was down 9 percent for the year and 17 percent for the fourth quarter.
Only its Wizards of the Coast and digital gaming divisions saw their financials improve for the year, with fourth-quarter revenue up 22 percent and 2022 revenue up 3 percent. Hasbro saw its revenue decline 12 percent in the fourth quarter and 17 percent in 2022.
The company will assume $300 million in fees related to its business and entertainment plan changes, and $21 million in costs associated with the eOne acquisition.
The cost-cutting move also comes after Hasbro prevailed in a boardroom proxy battle against Alta Fox Management. The activist investor failed to get shareholders to back his call for Hasbro to spin off its games division to unlock shareholder value.
Hasbro’s board of directors reiterated that spinning off the games division was not required to realize greater shareholder value at the toymaker. Seeing Alta Fox’s power battle challenge marked a victory for newly installed CEO Cocks amid the toymaker’s drive to become a gaming powerhouse.
Following the death of CEO Brian Goldner, Cocks became the company’s top executive after serving as president and COO of Wizards of the Coast and Digital Gaming division.