The toy and entertainment giant Hasbro says that 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-savings effort underway, with the company having already put its TV and film division Entertainment One up for sale.
“We are focused on implementing transformational changes aimed at substantially reducing costs and increasing our growth rates and profitability,” Hasbro CEO Chris Cocks said in a statement. “While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses.”
In selling eOne, Hasbro articulated a strategy in which it leans into franchise brands like Transformers, Peppa Pig, and Dungeons & Dragons, including in entertainment, though it may do so without its in-house studio. Hasbro looked to the eOne deal in 2019 to make the toy maker into a media contender as it combined the indie studio’s film and TV unit with its own.
But the pandemic disrupted that media strategy with a Hollywood production shutdown and delays in content deliveries as the industry reopened.
Hasbro also announced that Hasbro’s president and COO Eric Nyman would leave the company, with a new organizational model set to be unveiled in the coming weeks. “The elimination of these positions will impact many loyal Hasbro employees, and we do not undertake this process lightly. However, the changes are necessary to return our business to a competitive, industry-leading position and to provide the foundation for future success,” added Cocks.
Hasbro released preliminary earnings, reporting 2022 revenue down 9 percent for the year, and 17 percent in Q4.
Only its Wizards of the Coast and digital gaming divisions saw their finances improve for the year, with Q4 revenues up 22 percent and 2022 revenues up 3 percent. Hasbro’s entertainment division saw its revenues decline 12 percent in Q4, and 17 percent in 2022.
The company is taking $300 million in charges related to its entertainment and business plan changes, and $21 million in costs associated with the acquisition of eOne.
The cost-cutting move also follows Hasbro having prevailed in a boardroom proxy battle against Alta Fox Management. The activist investor failed to get shareholders to back its call for Hasbro to spin off its gaming division to unlock shareholder value.
Hasbro’s returned board reiterated that spinning off the gaming division was not required to realize greater shareholder value at the toy maker. Seeing off Alta Fox’s proxy battle challenge marked a victory for newly-installed CEO Cocks amid the toy maker’s drive towards becoming a gaming powerhouse.
Following the death of CEO Brian Goldner, Cocks became the company’s top exec after serving as president and COO of the Wizards of the Coast and Digital Gaming division.
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