Hasbro Announces That It Is Cutting 15% Of It's Global Workforce

A quick read says to me that this doesn't seem to impact the action figure brands that Hasbro is currently fielding, and Hasbro has so many different brands outside of that specific focus.Candidly, I think that the action figures have largely been pared down quite a bit, in terms of what the major licenses offer. Marvel figures today LOOK skimpy over all, especially as the price-point keeps rising.

Being of a certain age, nothing about this surprises me. I genuinely feel sorry for any youngsters here who are filled with righteous indignation at the prospect that a company they spend their money on and support would continually raise prices, cut costs and eliminate employees. I can only laugh really and remember a bit of the Whig philosophy: In an imperfect world, with imperfect people, no one is completely honest and no one completely loyal... life is a comedy to those who think, and a tragedy to those who feel.

On 1/27/2023 at 3:54 AM, JayC said:Hasbro, Inc. (NASDAQ: HAS), a global branded entertainment leader, today announced leadership and organizational changes, including the elimination of approximately 15% of its global workforce this year. The reductions will start to take effect within the next several weeks. With these actions, along with ongoing systems and supply chain investments, the Company is on track to achieve its goal of $250-300M in annual run-rate cost savings by year-end 2025 to drive profitability and reinvestment in core brand growth."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."We are focused on implementing transformational changes aimed at substantially reducing costs and increasing our growth rates and profitability. While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses. Through this strategy, we are putting the consumer at the center of everything we do, and our Operational Excellence program is on track to drive significant cost savings across the business and improve our overall competitiveness. These strategic pillars helped to improve our results, particularly operating profit margin and revenue growth in key categories, in a challenging fourth quarter, and lay the groundwork for continued progress in 2023."Preliminary Financial ResultsFourth Quarter 2022 Selected Preliminary ResultsPreliminary fourth quarter 2022 revenue of approximately $1.68 billion, down 17% year-over-year; down approximately 14% in constant currency.Wizards of the Coast and Digital Gaming segment revenue of approximately $339 million, up 22% year-over-year; Consumer Products segment revenue of approximately $1.0 billion, down 26% year-over-year; and Entertainment segment revenue of approximately $335 million, down 12% year-over-year.Preliminary operating loss margin of 8.3% to 7.5%; Preliminary adjusted operating profit margin of 15.8% to 16.0%, excluding total pre-tax charges of approximately $300 million associated with changes in entertainment and business plans as part of the Blueprint 2.0 strategy, approximately $21 million in pre-tax charges related to amortization of costs from the eOne acquisition, and cash charges of approximately $78 million associated with workforce reductions and related fees associated with the execution of the Blueprint 2.0 strategy.Preliminary earnings loss per share of $1.00 to $0.93; Preliminary adjusted earnings per diluted share of $1.29 to $1.31, excluding the impact of the charges set forth above.Full-Year 2022 Selected Preliminary ResultsPreliminary full-year 2022 revenue of approximately $5.86 billion, down 9% year-over-year; down approximately 6% in constant currency.Wizards of the Coast and Digital Gaming segment revenue of approximately $1.33 billion, up 3% year-over-year; Consumer Products segment revenue of approximately $3.57 billion, down 10% year-over-year; and Entertainment segment revenue of approximately $959 million, down 17% year-over-year and down 12% excluding $65 million of revenue associated with the music business which was sold in 2021.Preliminary operating profit margin of 6.7% to 7.0%; Preliminary adjusted operating profit margin of 15.7% to 15.8%, excluding total pre-tax charges of approximately $520 million, including the Q4 charges described above and $120 million recognized through the third quarter 2022.Preliminary earnings per diluted share of $1.40 to $1.46; Preliminary adjusted earnings per diluted share of $4.43 to $4.45, excluding the impact of the charges set forth above.Leadership and Organizational ChangesIn October 2022, the Company announced a goal of delivering $250-300 million in annualized run-rate cost savings by year-end 2025. In alignment with this programs objectives, the Company is undertaking organizational changes that will result in the elimination of approximately 1,000 positions from its global workforce this year, or approximately 15% of global full-time employees. The changes will include a new organizational model, commercial alignment, and leadership changes that the Company will discuss in more detail on its upcoming earnings conference call."The elimination of these positions will impact many loyal Hasbro 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," said Cocks.As part of these organizational and commercial changes, Eric Nyman, president and chief operating officer, is departing Hasbro. At this time, the Consumer Products business will report directly to the CEO."We are grateful for Erics dedication to Hasbro over the last 18 years and the leadership he has provided. On behalf of everyone at Hasbro, we wish him well in his future endeavors," said Cocks.These preliminary results for 2022 are an estimate, based on information available to management as of the date of this release, and are subject to further changes upon completion of the Companys quarter and year-end procedures. Hasbros preliminary financial results should not be viewed as a substitute for full audited financial statements prepared in accordance with U.S. GAAP, and undue reliance should not be placed on these preliminary financial results. Hasbros independent registered public accounting firm has not audited the preliminary financial results included in this press release or expressed any opinion or other form of assurance on such preliminary financial results. In addition, items or events may be identified or occur after the date of this press release due to the completion of operational and financial closing procedures, final audit adjustments and other developments that may require Hasbro to make material adjustments to the preliminary financial results included in this press release.Conference Call & WebcastHasbro will webcast its fourth quarter and full-year 2022 earnings conference call on Thursday, February 16, 2023, at 8:30 a.m. Eastern Time. The webcast and the accompanying presentation slides will be available to investors and the media on Hasbros Investor Relations home page at https://investor.hasbro.com/. A replay of the call will be available at the same location approximately two hours following completion of the event.Certain financial and statistical information included in the webcast, such as information required by Regulation G, will be available at the time of the webcast on Hasbros Investor Relations website at https://investor.hasbro.com.About HasbroHasbro is a global branded entertainment leader whose mission is to entertain and connect generations of fans through the wonder of storytelling and exhilaration of play. Hasbro delivers engaging brand experiences for global audiences through gaming, consumer products and entertainment, with a portfolio of iconic brands including MAGIC: THE GATHERING, DUNGEONS & DRAGONS, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH and PEPPA PIG, as well as premier partner brands.Hasbro is guided by our Purpose to create joy and community for all people around the world, one game, one toy, one story at a time. For more than a decade, Hasbro has been consistently recognized for its corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media, one of the Worlds Most Ethical Companies by Ethisphere Institute and one of the 50 Most Community-Minded Companies in the U.S. by the Civic 50. For more information, visit corporate.hasbro.com. 2023 Hasbro, Inc. All Rights Reserved.

Let me pose this one, simple clear question: are you as a company, moving forward as the engine room of a greater organism, genuinely embracing and honoring the fundamentals underpinning the goals expressed in your mission statement? Are you nurturing your ongoing commitment to excellence at every level, both in terms of your charter and at your customer interface? Because as you know, that is your mandate. Outcome focus as a means of achieving positive deliverables, within a realizable, factual, matrix.

So...surpass 2022 Q1 earnings projections by miles and then make the decisions to cut packaging costs and increase figure costs by 30% all while suffering from global supply chain issues. Finally, lay off a huge portion of your workforce because your ridiculous business plan didn't work during a recession. The people that need to be laid off are those who made these decisions.

Really sucks for all those workers

This is what I wrote on a Star Wars site when I read the same news. I feel the Star Wars brand is in much worse shape than the Marvel Legends brand, but some of the same types of things could apply in the years to come. Right now Marvel Legends still has a good character supply to draw from, although I think there is a danger of collector fatigue. In my opinion, Hasbro needs to be careful with what they do going forward, and their Haslab projects need to return to the level of the Sentinel and Galactus.

$17-$18 dollar basic figure price points for 3.75" figuresNo vehicle support that doesn't surpass $100 on store shelves for old molds.Two consecutive Haslab failures.$25+ dollar 6" figure prices.EVERY figure is a re-issue, or a deluxe piece with a new gimmick to add cost, like a backpack, an extra blaster, a store "exclusive", or a character "tax".I can't remember the last time I've seen or read about a "new" figure. One without reusing parts or a simple repaint, in either scale.The unpopular plastic free packaging.A business model that charges more for fewer customers.Consumers leaving the line day by day.

I stated more than five years ago that this strategy was destined to failure. I suggested a new toy company like Mattel acquire the line, or perhaps Disney sign over the rights to the company that did the Jawa Sandcrawler, a vehicle that had a $100 price tag, came with electronics, play features, was a decent scale, and had two figures.

I was rebuffed every single time with the same sets of arguments even though it was clear that the line will end with Hasbro, if things do not change, and drastically so.

When pressed for an answer as to why it wouldn't be viable for a company, say Mattel, to take over the line, I was informed that the fan base, (meaning themselves), wouldn't want to purchase Vader's and Luke's again from another company. I responded that nobody makes anybody buy anything, and maintain that the line would be much better off with another company - mainly because it couldn't get any worse.

I was wrong, and it has gotten worse, a lot worse.

It's time for antiquated, fear based, and frankly arrogant thinking to end. If collectors want to collect Star Wars figures in the future major things have to change. Either Hasbro has to do a 180, which they can't - they are simply too handcuffed and have the wrong business model. Or someone else needs to come in and get a shot at fixing the line.

On 1/27/2023 at 9:19 AM, Reno said:

Honestly, this isn't really all that alarming considering that we're entering a global recession. Honestly, just about any company with 1,000 or more employees will likely be cutting around 10% or more of their workforce sometime over the next 12-24 months. Most large corporations honestly have at least some reduction in labor expenses every single quarter if you listen to their earnings calls, it's just usually that it doesn't make national news because it's such an ordinary part of business. Although this always sucks for anybody who loses their job, I experienced that in 2008. The whole point of being a large business is to be more cost efficient. If we had fewer large mega corporations there would be a lot more jobs in this country because the small business would need to have more employees, but everything would also cost a lot more because we wouldn't have the large companies being able to keep their costs so low. Still I think fewer large corporations and more smaller businesses would end up being best for everyone in the end.

Then again, it would help a lot if they stop putting so much time and resources behind garbage like a bunch of the Star Wars Sequel Trilogy stuff, the G.I. Joe Origins stuff and the soon to be rotting on the shelves D&D: HAT stuff. But then again, who am I except a long time consumer who knows junk when I see it?

Honestly, this isn't really all that alarming considering that we're entering a global recession. Honestly, just about any company with 1,000 or more employees will likely be cutting around 10% or more of their workforce sometime over the next 12-24 months. Most large corporations honestly have at least some reduction in labor expenses every single quarter if you listen to their earnings calls, it's just usually that it doesn't make national news because it's such an ordinary part of business. Although this always sucks for anybody who loses their job, I experienced that in 2008. The whole point of being a large business is to be more cost efficient. If we had fewer large mega corporations there would be a lot more jobs in this country because the small business would need to have more employees, but everything would also cost a lot more because we wouldn't have the large companies being able to keep their costs so low. Still I think fewer large corporations and more smaller businesses would end up being best for everyone in the end.