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Hasbro to cut 15% of workforce in 2023, estimates dour holiday quarter
© Reuters. FILE PHOTO: The Hasbro, Inc. logo is seen on a toy for sale in a store in Manhattan, New York, U.S., November 16, 2021. REUTERS/Andrew Kelly
By Deborah Mary Sophia
(Reuters) -Hasbro Inc said on Thursday it would cut about 15% of its global workforce this year, and projected holiday-quarter results to be well below Wall Street expectations amid weakening demand for its toys and games.
Shares of the maker of Transformers toys fell more than 7% to $59.25 in extended trading after the company said it would eliminate about 1,000 full-time positions globally. Rival Mattel Inc (NASDAQ:MAT) also slipped about 2%.
Hasbro (NASDAQ:HAS) said the job cuts would start to take effect within the next several weeks, adding that the reductions were "necessary to return our business to a competitive, industry-leading position."
Hasbro joins a growing list of companies, ranging from tech majors to banks, to have reduced jobs amid threats of a recession, with the Monopoly maker warning in October that demand was starting to slip ahead of the holiday season.
"Despite strong growth in Wizards of the Coast and Digital Gaming... our consumer products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment," CEO Chris Cocks said.
Hasbro estimated a 26% slump in revenue from its consumer products segment, compared with a 22% jump in its Wizards of the Coast and Digital Gaming business.
"The Q4 shortfall does not come as a total surprise... (but) the magnitude of the shortfall in the Consumer Products business was sort of shocking," D.A. Davidson Analyst Linda Weiser said.
Hasbro estimated fourth-quarter revenue to fall 17% to about $1.68 billion. Analysts on average expect revenue of $1.92 billion, according to Refinitiv IBES data.
The company, which is set to report results on Feb. 16, estimated quarterly adjusted earnings per share of $1.29 to $1.31, lower than analysts' expectations of $1.48.
Hasbro added that Eric Nyman, president and chief operating officer, was also exiting the company as part of organizational changes.
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