Hasbro is currently in the process of downsizing its workforce by 1,100 employees, following the 800 job cuts implemented in January. The company's strategic objective is to achieve cost savings ranging up to $400 million by the next two years.
Reducing Workforce
Hasbro is in the process of laying off 1,100 employees, adding to the 800 job cuts implemented in January. TechCrunch reported that the fate of some employees will be revealed on Tuesday, while others will face layoffs in the coming year.
Hasbro aims to achieve cost savings ranging from $350 million to $400 million by 2025, as communicated to shareholders.
In a memo shared within the SEC filing, Hasbro CEO Chris Cocks outlined a strategic shift, directing the company's focus towards licensing opportunities, scaling entertainment efforts, and reallocating resources to drive new brand development. Cocks attributes the company's losses to vague market headwinds.
Despite Hasbro's overall 10% year-over-year revenue decline, the company boasts ownership of Wizards of the Coast (WoTC), the creator of Dungeons & Dragons (D&D) and Magic the Gathering, generating over a billion dollars annually.
Facing Other Challenges
In the segment overseeing WoTC and digital gaming, there's a remarkable 40% year-over-year revenue increase, amounting to $423.6 million and yielding a $203.4 million operating profit.
Despite this robust growth in a specific division, Hasbro, as a whole, has encountered challenges. Consequently, it appears that Cocks is steering the company's focus towards the segments that are driving profitability.
The Wall Street Journal reported that Dungeons & Dragons has experienced a surge in popularity, attributed in part to third-party content creators like Critical Role and Dimension 20, who entertain audiences by playing D&D.
The franchise's success also extends to a Hollywood film release and the highly acclaimed Baldur's Gate III, a video game featuring Dungeons & Dragons intellectual property. Recently, Baldur's Gate III clinched the prestigious Game of the Year award at the Game Awards.
Navigating an intriguing juncture, Hasbro experiences a decline in its toys business while unexpectedly finding a lucrative asset in Wizards of the Coast, a company it acquired 24 years ago.
Cocks shed light on the company's strategy for Dungeons & Dragons (D&D) during an investor call last December, emphasizing a broad four-quadrant approach. In comparison to iconic franchises like 'Lord of the Rings' or 'Harry Potter,' D&D holds significant brand awareness.
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However, CNN reported that Hasbro faces challenges in transforming Dungeons & Dragons, a game system known for its player-driven narratives, into a universally recognized brand akin to Harry Potter or Lord of the Rings.
Despite receiving positive reviews upon its March release, the movie "Dungeons & Dragons: Honor Among Thieves" fell short of expectations at the box office, signifying growing pains in Hasbro's endeavor to elevate D&D to the level of universally known characters and stories.
Cocks outlined the imperative of securing a robust and profitable foundation for Hasbro's growth. Cocks emphasized the need to modernize the organization and achieve increased efficiency as the initial steps in positioning Hasbro for sustained success.
