Game and toy maker Hasbro announced it will cut roughly 1,100 jobs on Monday. When added to the 800 layoffs made earlier this year, the total amounts to just less than one-third of the company’s entire labor force. The news comes exactly two weeks ahead of Christmas, traditionally the biggest holiday of the year for game and toy sales.
“We entered 2023 expecting a year of change including significant updates to our leadership team, structure, and scope of operations,” said CEO Chris Cocks in a memo to his employees that was shared with Polygon. “We anticipated the first three quarters to be challenging, particularly in Toys, where the market is coming off historic, pandemic-driven highs. While we have made some important progress across our organization, the headwinds we saw through 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 tracking the shortfalls of the company’s toy portfolio for some time. Meanwhile, Hasbro subsidiary Wizards of the Coast, which publishes both Dungeons & Dragons and Magic: The Gathering, is experiencing all-time highs for both revenue earned and the number of players engaged in those brands. Activist hedge fund Alta Fox attempted to push the Rhode Island-based company to spin off Wizards in 2022, but the effort was defeated in a high-profile shareholder election in June 2022. Now the 100-year-old company is left to rebuild in 2024.
Polygon reached out to the tabletop teams impacted by these layoffs, including Avalon Hill, Magic: The Gathering, and Dungeons & Dragons. One representative said that the company is “not sharing breakdowns on geography or teams out of respect for employees.” Impacted workers are expected to be contacted by the end of the business day Tuesday.
“Cost-cutting is not a strategy,” Cocks added. “We know this, and that’s why we’ll continue to grow and invest in several areas in 2024.”
One area of investment for Hasbro appears to be the video game sector. Its latest project, Exodus, made a big splash last week at The Game Awards. Following the success of Baldur’s Gate 3, which was produced under license by Larian Studios, Wizards’ own Archetype Entertainment appears to have a solid footing. Founded by veterans of BioWare, the studio behind Star Wars: Knights of the Old Republic, Baldur’s Gate, Neverwinter Nights, and the Mass Effect trilogy, the game will be released on PlayStation 5, Windows PC, and Xbox Series X. It currently has no release date.
Hasbro stock has fallen some 20% this year according to The Wall Street Journal, with today’s price down slightly on the news. Long-term investors, meanwhile, are expected to continue to earn dividends at a rate of 5.8% annually according to Google Finance. Cocks earned a reported $9.4 million last year — his first year as Hasbro’s CEO. At the new price point of $59.95, that’s roughly equivalent to 156,797 copies of the Player’s Handbook.
