Toy and entertainment giant Hasbro said it would cut its workforce by 15%, or 1,000 employees, in the coming weeks.
The significant layoffs are part of a broader ongoing restructuring and cost-cutting effort, with the company having already put its Entertainment One TV and cinema division up for sale.
«We are focused on implementing transformational changes to significantly reduce costs and increase our growth rates and profitability,» Hasbro CEO Chris Cocks said in a statement. “While 2022, and the fourth quarter in particular, has been a challenging time for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which emphasizes fewer, bigger brands; games; digital; and our growing direct-to-consumer and licensing businesses. »
In selling eOne, Hasbro has crafted a strategy in which it leverages franchise brands like Transformers, Peppa Pig, and Dungeons & Dragons, including in entertainment, though it may do so without its in-house studio. Hasbro turned to the eOne deal in 2019 to make the toymaker a media competitor by combining the independent studio’s film and TV unit with its own.
But the pandemic has disrupted that media strategy with a shutdown in Hollywood production and delays in content deliveries as the industry reopens.
Hasbro also announced that Hasbro President and COO Eric Nyman will be leaving the company, with a new organizational model expected to be unveiled in the coming weeks. «The removal of these positions will impact many loyal Hasbro employees, and we are not undertaking this process lightly. However, the changes are necessary to restore our company to a competitive position as an industry leader and to lay the foundation for our future success,” added Cocks.
Hasbro released its preliminary results, reporting 2022 revenue down 9% for the year and 17% in the fourth quarter.
Only its Wizards of the Coast and Digital Games divisions saw their finances improve for the year, with fourth quarter revenue up 22% and 2022 revenue up 3%. Hasbro’s entertainment division saw revenue decline 12% in the fourth quarter and 17% in 2022.
The company is taking on $300 million in charges related to its entertainment and business plan changes, and $21 million in costs associated with the eOne acquisition.
The decision to cut costs also follows Hasbro’s victory in a boardroom proxy battle against Alta Fox Management. The activist investor failed to convince shareholders to back his call for Hasbro to spin off its games division to unlock shareholder value.
Hasbro’s board reiterated that the spin-off of the games division was not necessary to realize greater shareholder value at the toymaker. Seeing Alta Fox’s proxy 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 the Wizards of the Coast and Digital Gaming division.