Hasbro Inc. is cutting close to 20% of its staff, blaming slumping sales of toys and games during the crucial holiday shopping season.
The maker of the Dungeons & Dragons and Transformers franchises will cut about 1,100 jobs over the next 18 to 24 months, including 200 left over from an earlier round of cuts, Chief Executive Officer Chris Cocks said Monday in a memo to employees.
“The market headwinds we anticipated have proven to be stronger and more persistent than planned,” Cocks said.
Hasbro has struggled to shake off a post-pandemic hangover. Parents loaded up on toys while kids were stuck at home but have cut back since. Analysts expect the company’s sales to decline 19% this quarter.
Shares of Hasbro fell as much as 8.7% to $44.65 in extended trading before recovering somewhat.
The cuts are expected to result in annual savings of $100 million, the company said in a related filing. Management expects of about $134 million in related costs, such as severance.
A Hasbro spokesman declined to elaborate beyond the memo. The Wall Street Journal reported on the actions earlier Monday.
Hasbro also said it won’t renew a lease in January 2025 on an office building in Providence, Rhode Island, and will relocate employees based there to its nearby headquarters in Pawtucket.
Hasbro lowered its annual revenue forecast in October due to a softer toy market heading into the holiday season.
To reckon with the industry conditions, Hasbro and rival Mattel Inc. are seeking to evolve their toy businesses into entertainment properties by bringing popular brands such as Dungeons & Dragons and Barbie to the big screen.