Game and toy maker Hasbro announced Monday that it will cut about 1,100 jobs. Added to the 800 layoffs earlier this year, the total amounts to just under a third of the company's total workforce. The news comes just two weeks before Christmas, traditionally the biggest holiday of the year for games and toy sales.
“We entered 2023 expecting a year of change, including significant updates to our leadership team, the structure and scope of our operations,” CEO Chris Cocks said in a memo to employees shared with Polygon. “We expected the first three quarters to be challenging, especially in Toys, where the market is coming off historic pandemic-driven highs. While we have made significant progress across our organization, the headwinds we saw in the first nine months of the year have continued into Holiday and are likely to persist into 2024.”
The news likely comes as no surprise to insiders, including investors, who have been keeping an eye on the shortcomings of the company's toy portfolio for some time. Meanwhile, Hasbro subsidiary Wizards of the Coast, which has both Dungeons & Dragons and… Magic: the meeting, is experiencing unprecedented heights for both revenue earned and the number of players involved with those brands. Activist hedge fund Alta Fox tried to push the Rhode Island-based company to spin off Wizards in 2022, but that failed in 2022. a high-profile shareholder election in June 2022. Now the 100-year-old company must be rebuilt in 2024.
Polygon reached out to the tabletop teams affected by these layoffs, including Avalon Hill, Magic: the meetingand Dungeons & Dragons. One representative said the company “does not share geography or team breakdowns out of respect for employees.” The employees involved are expected to be contacted by the end of the business day on Tuesday.
“Cost reduction is not a strategy,” Cocks added. “We know that and that is why we will continue to grow and invest in various areas in 2024.”
One area of investment for Hasbro appears to be the video game sector. His latest project, Exodus, made a big impression last week at The Game Awards. After the success of Baldur's Gate 3, which was produced under license by Larian Studios, Wizards' own Archetype Entertainment appears to be on solid footing. Founded by veterans of BioWare, the studio behind it Star Wars: Knights of the Old Republic, Baldur's Gate, Neverwinternightsand the Mass Effect trilogy, the game will be released on PlayStation 5, Windows PC and Xbox Series X. There is currently no release date.
According to Hasbro's numbers, Hasbro shares are down about 20% this year The Wall Street Journal, with today's price falling slightly on the news. Long-term investors, meanwhile, are expected to continue earning a dividend of 5.8% per year. Google Finance. Cocks deserved a report $9.4 million last year – his first year as CEO of Hasbro. At the new price of $59.95, that equates to approximately 156,797 copies of the Player's Handbook.
Update (December 13): From Wednesday morning posts on social media In the wake of Hasbro's budget cuts, the impact within Wizards of the Coast is evident, from IT staff to presenters to game designers and artists. There have even been layoffs basic members from the 5th Edition Dungeons & Dragons team, meaning those who built the most successful version of the groundbreaking RPG won't be around when it turns 50 in 2024.