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Toy giant Hasbro, which, among other things, offers Magic the Gathering and Dungeons and Dragons via Wizards of the Coast, has announced that it will have to lay off 1.100 employees before Christmas. The reason for the move is the current market situation.
It's hard to believe in the real hype in the toy market anymore: dealers and sales companies work tirelessly to clear the warehouses of old items - i.e. slow sellers or excess stock - with new discounts in order to ultimately save costs. At Kickstarter and Co., not all crowdfunding is going smoothly anymore - and now Hasbro is also getting involved with the latest bad news: around 1.100 jobs at the toy giant are to be lost again.
Hasbro boss: “Headwind”
It is not the first wave of layoffs at Hasbro this year: around 800 employees have already had to leave, and around 1.100 more will now join them. And before Christmas, according to a report in the renowned Wall Street Journal (WSJ) emerges. On Monday had Hasbro announced the decision and pointed to the current “headwind” in the toy and gaming market as the reason behind the measure. Behind this, in turn, are adjusted profit estimates that could be even lower than the group had already conservatively estimated.
The announcement from Hasbro boss Chris Cocks about the layoff plans is likely to cause quite a stir in the industry, after all Hasbro not least because of the recently booming Magic the Gathering division and also as a real sales heavyweight as a license marketer. Around a fifth of the total of almost 6.400 employees are now to be cut off. The Wall Street Journal apparently received the remarkable information in an internal memo to Hasbro employees.
Hasbro only began implementing savings plans in January. Around 800 jobs were lost, which should ultimately lead to savings of around $300 million by 2025 alone. At the start of the year it was said, Hasbro I want to concentrate on fewer but stronger brands and also invest in digital developments in particular. The focus was also on plans to market licenses more strongly, which was ultimately successful in the case of Baldur's Gate 3, for example.
Streamlining structures and focusing on profitable brands and goods seemed to be a logical approach. Now the wind on the toy market has apparently changed so much that the company was forced to take the drastic step: According to Hasbro boss Chris Cocks, there was the aforementioned “headwind” in the first nine months of the year - and it is moving away CEO forecasts not just for the holidays, but right into 2024 across Hasbro.
Cocks, who has only been CEO of Hasbro since 2022 and, according to the US Securities and Exchange Commission, received a base salary of $1,5 million last year without bonuses, says that they are confident when looking at the situation future, but I still had to make the decision. It is one of the most difficult so far, especially in terms of timing.
“There's no sugarcoating how difficult this is, especially for the employees directly affected,” Cocks commented to the Wall Street Journal. Ultimately, the measure had to be taken to “keep Hasbro healthy.” The employees affected will now be informed in the next six months.
And Hasbro continues to slim down: the “underutilized” office in Providence, Rhode Island, is being given up. Otherwise, it is currently unclear whether and how the mass layoffs will actually affect strong brands such as Dungeons and Dragons or Magic the Gathering. Ultimately, Hasbro shares were unable to keep up with the success of these two brands - the stock lost just over 2022 percent of its value in 20.
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