Hasbro to lay off 1,100 employees due to ongoing weak toy sales during the holiday season
OAN’s James Meyers
10:08 AM – Tuesday, December 12, 2023
Toy maker company Hasbro is facing a major setback as it plans to lay off approximately 1,100 employees due to disappointing sales leading up to the holiday shopping season.
CEO Chris Cocks delivered the news of the workforce reduction, which accounts for nearly 20% of the company’s employees, in a memo to staff on Monday. This comes after the company had already cut almost 800 jobs earlier this year.
According to a Hasbro fact sheet, the company had close to 6,300 employees as of earlier this year.
Furthermore, the company’s shares experienced a decline of over 4% in extended trading on Monday.
“We anticipated the first three quarters to be challenging, particularly in Toys, where the market is coming off historic, pandemic-driven highs,” Cocks said in the memo. “While we have made some important progress across our organization, the headwinds we saw through the first nine months of the year have continued into Holiday and are likely to persist into 2024.
This decision follows Hasbro’s warning in October that its revenue would continue to decline towards the end of the year. The company adjusted its full-year outlook, projecting a 13% to 15% decrease in revenue.
In addition, popular toy brands such as My Little Pony, Transformer, and Nerf experienced an 18% drop in the October quarterly report due to “softer category trends.”
Hasbro’s competitor, Mattel, also expressed concerns about lower sales numbers. However, Mattel’s stock saw a 6% increase on Monday, thanks to the success of the movie “Barbie” at the box office.
Retailers may face a challenging holiday season as toys are being offered at lower discounts compared to last year.
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What factors have contributed to the decline in sales for Hasbro and other toy companies in the post-pandemic market?
Due to the current economic climate and uncertain consumer behavior. Both companies are facing challenges in navigating the post-pandemic toy market.
The layoffs at Hasbro are a significant blow to the employees who will be impacted by this decision. It is always unfortunate to see individuals lose their jobs, especially during the holiday season when financial stability is crucial. The company’s move to reduce its workforce is a direct result of lower-than-expected sales, indicating that the demand for their products has not met projections.
CEO Chris Cocks acknowledged the difficulty of the current market situation in his memo to staff. He mentioned the challenges faced by the toy industry as it transitions from the pandemic-driven demand to a more stabilized state. Cocks also expressed concerns about the persisting headwinds in the industry throughout the coming year.
This setback for Hasbro highlights the importance of adaptability and innovation in the toy industry. As consumer preferences evolve and the market landscape continues to change, companies need to find new ways to engage with their target audience. It is crucial for them to invest in research and development, identifying trends and creating products that appeal to the current market demands.
The decline in revenue and lower sales numbers reported by Hasbro and Mattel reflect the overall challenges faced by the toy industry. The pandemic has disrupted various industries globally, and the toy sector is no exception. As families faced economic uncertainties and adjusted their lifestyles, their purchasing behaviors also changed. The preference for remote learning and digital entertainment may have impacted the sales of traditional toys.
However, it is essential to note that the toy industry has shown resilience in the past. It has overcome challenges and adapted to new market conditions. Companies like Hasbro and Mattel have a long history of innovation and successful product launches. By reassessing their strategies and staying attuned to consumer preferences, they can navigate these difficult times and emerge stronger in the future.
As the holiday season approaches, both Hasbro and Mattel will focus on maximizing their sales. They will continue to promote their popular toy brands and engage with consumers through marketing campaigns. The success of their holiday season sales will be critical in determining their financial performance for the year.
In conclusion, Hasbro’s decision to lay off employees due to disappointing sales reflects the challenges faced by the toy industry amidst the evolving market dynamics. The company’s struggle highlights the importance of adaptability and innovation in meeting consumer demands. As the industry moves forward, it is crucial for companies to assess market trends, invest in research and development, and embrace new technologies to stay competitive.
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