Toy company Hasbro is set to lay off approximately 1,100 employees as part of its ongoing efforts to navigate the challenging market conditions and transform its business, according to a company memo.

CNBC reported that this move comes as Hasbro faces weak toy sales, which have extended into the crucial holiday shopping season.

(Photo : Justin Sullivan/Getty Images)
SAN RAFAEL, CA - JULY 23: The Hasbro logo is displayed on Marvel Iron Man toys at a Target store on July 23, 2018 in San Rafael, California.

Toy Company Hasbro to Reduce Headcount

The memo, penned by Hasbro CEO Chris Cocks, noted that the first three quarters of the year proved to be challenging, particularly in the toys segment, where the market is readjusting from historic pandemic-driven highs. 

Despite significant progress in various organizational aspects, the headwinds experienced throughout the year are expected to persist into 2024.

This decision to reduce headcount is part of Hasbro's broader strategic transformation following previous layoffs earlier in the year. The company had already signaled potential difficulties in October when it lowered its full-year revenue outlook, predicting a decline of 13% to 15% for the year.

In the same October report, Hasbro revealed a notable drop in sales of popular toy brands, such as My Little Pony, Nerf, and Transformer, which declined by 18% because of softer category trends. According to CNBC, the toy maker's stock has seen a nearly 20% decline through Monday's close.

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What's Next for Hasbro

Chris Cocks emphasized that the decision to reduce the workforce is a challenging one but deemed necessary to solidify Hasbro's foundation and profitability amid the current business environment. 

The company is aiming to modernize its organization and enhance efficiency. Most of the layoffs will be communicated over the next six months, with additional notifications occurring over the next year as part of the ongoing efforts to streamline the organizational model. 

While some functional areas will be more affected than others, the company aims to minimize the scale of impact by offering comprehensive packages to affected employees, including job placement support.

The memo also outlined other steps that will be taken, such as exploring options to reduce the global real estate footprint, including exiting an underutilized office space in Providence, Rhode Island, by January 2025.

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