Hasbro’s stock is dropping in after-hours trading after the toy company announced on Thursday that it plans to cut its workforce by 15% this year, or approximately 1,000 employees.
In a news release announcing the impending cuts, Hasbro also announced preliminary earnings reports, anticipating a 17% drop in revenue for the fourth quarter of 2022 and a 9% drop for the year. The few bright spots for the company came from its digital gaming division and “Dungeons & Dragons” publisher Wizards of the Coast, which saw quarterly revenue increases of 20% and 22% respectively.
“Despite strong growth in Wizards of the Coast and Digital Gaming, Hasbro Pulse, and our licensing business, our Consumer Products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” said Chris Cocks, Hasbro chief executive officer.
In after-hours trading, Hasbro’s stock fell by as much as 9% after closing at $63.78.
“The elimination of these positions will impact many loyal employees, and we do not undertake this process lightly. However, the changes are necessary to return our business to a competitive, industry-leading position and to provide the foundation for future success,” Cocks added.
The announcement comes after Hasbro announced this past October that it is looking to reduce costs by $250-300 million annually through 2025. To this end, the company announced that it would look into a sale of its television and film production company, Entertainment One. Hasbro’s entertainment division saw a 17% decline in annual revenue in 2022.
Despite this sale, the company has said that it will continue to look for new media opportunities for its franchises like “Dungeons & Dragons” and “Transformers,” both of which are getting feature films this year from Paramount Pictures thanks to the company’s production partnership. Paramount has also recently announced a “D&D” TV series for its streaming service, Paramount+