Hasbro, a leading name in the toy industry, is facing tough times.
The company is laying off about 1,100 employees due to a drop in sales that’s stretched into the holiday season.
This news, revealed through a memo obtained by CNBC, is a big deal because Hasbro had around 6,300 employees earlier this year.
The impact of this decision is clear in the stock market too, with Hasbro’s shares falling more than 5% on Tuesday morning.
Even Mattel, another big toy company, is feeling the pinch, with its shares also going down.
Hasbro’s CEO, Chris Cocks, explained the situation in the memo.
He said, “We anticipated the first three quarters to be challenging, particularly in Toys, where the market is coming off historic, pandemic-driven highs.”
He admitted that although they’ve made some progress, the tough times seen in the first nine months of this year have continued into the holiday season and might go on into 2024.
This isn’t the first time Hasbro is cutting jobs this year.
They already had to let go of several employees earlier. Back in October, Hasbro warned that things might get rough. The company’s latest quarterly earnings report showed they’re expecting a 13% to 15% drop in revenue for the year.
Popular toys like My Little Pony, Nerf, and Transformer aren’t selling as well as they used to.
Sales of these brands have fallen by 18%, mainly due to less interest in these types of toys.
This situation has led to Hasbro’s stock value decreasing by nearly 20% up to Monday.
Mattel, on the other hand, while also dealing with slow sales, got a boost from the movie “Barbie.”
Their stock is up by about 6% through Monday. However, this is still behind the S&P 500’s 17% gain for the year.
The toy industry, in general, seems to be having a lukewarm holiday season.
Consumers are seeing fewer discounts on toys compared to last year, adding to the challenges for both retailers and shoppers.
In short, Hasbro’s move to lay off workers reflects the broader economic struggles many companies are facing.
These challenges, especially during the holiday season, highlight the tough reality of the current economic climate, often referred to as “Bidenomics.”
This situation shows how even big, well-known companies like Hasbro are not immune to the difficulties of today’s market.
