Hasbro said Thursday it would eliminate around 1,000 employee positions and warned of weak holiday-quarter results.
Shares of the toy maker fell more than 6% in extended trading.
“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 Hasbro CEO Chris Cocks.
The layoff of around 15% of its global workforce comes as the company seeks to save between $250 million and $300 million annually by the end of 2025.
Hasbro said it expects fourth-quarter revenue, which includes the holiday season, to reach $1.68 billion, down 17% compared to the year-earlier period. Estimates had called for Hasbro to reach $1.92 billion during the quarter, according to data from Refinitiv.
For the full year, the company foresees revenue hitting $5.86 billion, down 9% compared to 2021.
“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,” Cocks said.
The company has faced revenue woes in recent quarters, as it contends with tough comparisons with pandemic-fueled toy sales, inflation weighing on consumers wallets and high levels of inventory.
Wizards of the Coast, which includes Dungeons and Dragons, Magic: The Gathering and digital gaming, will remain a bright spot, the toymaker said. The company expects the division to have generated $339 million in revenue during the fourth quarter, up 22% compared to last year, and reach $1.33 billion in revenue for the full year, up 3% from 2021.
The division recently came under fire from fans after Hasbro attempted to rewrite a two-decade-old open game license for Dungeons and Dragons in order to boost revenue. Earlier this month, the Rhode Island-based toymaker postponed its update of its licensing terms in order to address mounting concern from the D&D community, which largely viewed the proposed changes as overreaching and unfair to third-party content creators.
Hasbro said it still intends to create a new open game license, or OGL, but that it will not include a royalty structure or give itself access to intellectual property made by third-party content creators.
The company is set to report its fourth-quarter earnings Feb. 16.