Hasbro will lay off approximately 1,000 employees, around 15% of its global workforce, after a disappointing Q4, the company announced on Thursday. The layoffs will begin “within the next several weeks,” according to the announcement.
“Despite strong growth in Wizards of the Coast and Digital Gaming, Hasbro Pulse, and our licensing business, our Consumer Products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” Hasbro CEO Chris Cocks said in a statement accompanying the announcement.
The biggest problems were in the company’s Consumer Products segment, which includes toys and non-Wizards of the Coast games, where Q4 sales were down 26% vs. Q4 2021, and Entertainment, where sales were down 12%, according to preliminary numbers released by Hasbro. Those declines were partially offset by the Wizards of the Coast and Digital Gaming segment, where sales were up 22%, bringing the overall Q4 company sales to a 17% decline.
For the full year, sales in the Wizards of the Coast and Digital Gaming segment were up only 3%, dragged down by a Q3 decline of 16% (see “Hasbro Game Sales Down 23%“). Hasbro sales overall were down 9% in 2022.
The company is expecting a loss for Q4, dragged down by a series of charges: $300 million associated with changes in entertainment and business plans, likely including the divestiture of eOne assets, which the company announced in November (see “Hasbro Selling eOne Assets“); $21 million related to amortization of costs from the eOne acquisition; and $78 million associated with the layoffs and related fees associated with the new strategy.
The company is pursuing a strategy it calls Blueprint 2.0, which focuses on fewer, bigger brands; gaming; digital; and direct-to-consumer and licensing. The changes will include “a new organizational model, commercial alignment, and leadership changes.” The first of those changes was announced Thursday: Hasbro President and COO Eric Nyman, an 18-year Hasbro veteran, is leaving the company, and in the wake of his departure, the Consumer Products business will report directly to Cocks.
Cocks, who was President of Wizards of the Coast and Digital Gaming, took over as Hasbro CEO around a year ago, after an interim period following the death of longtime CEO Brian Goldner (see “WotC President to Run Hasbro“). Cocks has had a tough few weeks, not only due to the company’s weak Q4 and impending layoffs, but also due to the continuing furor surrounding WotC’s attempt to change the Open Gaming License, which allows third-party developers to use Dungeons & Dragons rules for their own games (see “Original OGL Architect’s Petition“).
Source: ICv2
