Update: A Hasbro representative responded to Dicebreaker with a copy of CEO Chris Cock's memo, adding: "We are not sharing breakdowns on geography or teams out of respect for employees." The original story follows below.
The corporate owner of Wizards of the Coast - maker of Dungeons and Dragons and Magic: The Gathering - will lay off 1,100 employees two weeks before Christmas. Hasbro announced the decision on December 11th, citing continued “headwinds” in the toy and games market cut into even their more conservative earnings estimates.
First reported by the Wall Street Journal, Hasbro CEO Chris Cocks disclosed the company’s plans to axe one-fifth of its roughly 6,400 employees via an internal memo to staff inside a regulatory filing. Hasbro is best known for classic children’s toys and board games - Play-Doh and Monopoly chief among them - along with entertainment properties such as Transformers and Peppa Pig.
Hasbro already reduced its workforce by 800 people in January of this year, a plan that was supposed to save $300 million annually by 2025, according to AP. At the time, Cocks trumpeted the company’s new tack: focus on fewer, larger brands, digital development and invest hard on direct-to-consumer and licensed deals (hello, Baldur's Gate 3). He also championed Wizards of the Coast’s gaming segment as a continued breadwinner amongst toy lines that couldn’t stop flagging in a post-pandemic economy. Now, Cocks says those “headwinds we saw through the first nine months of the year have continued into Holiday are likely to persist into 2024”.
“While we’re confident in the future of Hasbro, the current environment demands that we do more, even if these choices are some of the hardest we have to make,” Cocks said in an email to staff and published by the Wall Street Journal. “I know this news is especially difficult during the holiday season,” he continued. “There is no sugar-coating how hard this is, particularly for the employees directly affected”.
The rest of the memo characterised the massive number of layoffs as “a last resort” and a “lever we must pull to keep Hasbro healthy”. Cocks first stepped into the role of Hasbro CEO in February 2022 and now earns an annual salary of $1.5 million. He received $9.4 million in total compensation last year.
Affected employees will be notified over the course of the next six months. Hasbro plans to vacate its Providence, Rhode Island office when the lease ends in January 2024. Cocks noted that the company was not using it “to its full capacity” echoing a growing grumble amongst executives who are pushing remote and hybrid workers back into expensive urban offices to justify the real estate investment.
It’s unclear if the sweeping layoffs will affect Wizards of the Coast, potentially delaying or cancelling planned products for Dungeons & Dragons and Magic: The Gathering. Dicebreaker reached out to WotC for confirmation but did not receive a reply before publication. WotC’s two major tabletop brands have consistently performed well over the past four years, becoming a bit of a golden goose as Hasbro’s other segments struggle to keep up. [Update: Former Hasbro employees have confirmed that layoffs have affected many members of both the D&D and MTG teams, alongside wider Hasbro staff cuts.]
Other outlets have compared Hasbro’s stock performance against competitors such as Mattel - the wild success of the Barbie film boosted its stock price by nearly 6% in an economic environment where nobody is purchasing toys at their pre-COVID-19 levels. Hasbro’s own stock has nosedived 21% over the past year.
Cocks’ mention that the company broke the glass on decimating their workforce as a last resort fails to account for any reduction in executive salary, bonuses or additional compensation. The sale of the physical office is a drastic move for a company as old and traditional as Hasbro, but leaving 1,100 people without financial security days before Christmas doesn’t exactly lend Cocks and other C-suite members much of a charitable position from which to argue.