Mass layoffs at a toy store on Christmas Eve. Hasbro's “strategic transformation” will involve a much larger workforce cut than initially planned, as the company has communicated to the United States Securities and Exchange Commission (SEC). The company announced at the beginning of the year a workforce cut of 1,000 employees, of which it has carried out around 800 layoffs. Now, however, it has informed the staff that it will still cut another 1,100 jobs. In total, the adjustment will affect 29% of the workers of the seller of Peppa Pig and Transformers products, and games such as Monopoly and Dungeons and Dragons.
The company's executives carried out a first strategic review in October 2022. Following this, they announced an “operational excellence” program to save costs, transform the supply chain and some other restructuring actions to drive growth and improve profitability. value for shareholders. As part of this, Hasbro announced its intention to eliminate approximately 1,000 positions from its global workforce, approximately 15%.
This week, after a new analysis of the company's cost structure and organizational design, managers have decided to outsource some corporate functions and undertake a major workforce reduction. “Changes in the company's organizational structure will result in the reallocation of personnel and resources, which will include the voluntary early retirement of certain groups of employees and additional involuntary reductions of employees,” explains the company, which numbers 900 positions. additional to be removed in the next 18 to 24 months. Since the company closed 2022 with 6,490 employees, The cut of 1,900 jobs is just over 29% of the total.
CEO Chris Cocks has sent a message to employees explaining the new layoffs. “The market headwinds we expected have turned out to be stronger and more persistent than anticipated. While we are confident in Hasbro's future, the current environment demands that we do more, even though these decisions are some of the most difficult we have to make,” he says.
The company presents the figures to the workforce in a different way. He points out that 800 jobs have already been cut, so he announces the dismissal of about 1,100 additional workers. In any case, the total number is around 1,900. “Our management team has made this difficult decision after much deliberation. We recognize that this is tough news affecting the livelihoods of our friends and colleagues. Our goal is to communicate with each of you transparently and support you in this period of change,” he says. the message addressed to all the company's employees.
In it, the company explains that many of the affected people have been or will be informed in the next 24 hours, although the deadlines will vary by country, in accordance with local regulations and after consulting employees when necessary. “I know this news is especially difficult during the holidays,” Cocks acknowledges. “We have decided to communicate it now so that people have time to plan and process the changes,” he explains.
The company has already spent $94 million on severance pay, stock compensation and employee benefits in the first round of adjustments and expects to add another $40 million in the second. Hasbro estimates it will save about $100 million in annual gross costs with the new adjustment. It raises the total savings from the operational excellence plan for 2025 to 350-400 million, compared to the previous estimate of 250-300 million.
The company has been focusing on the digital game and on the most relevant brands it licenses, but the transition is being difficult and the results are not following. In the first nine months of the current fiscal year, Sales fell 11%, to 3,714 million dollars (about 3,450 million euros at the current exchange rate). The company suffered losses of 428 million dollars, compared to profits of 332 million in the equivalent period of the previous year.
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