Hasbro Inc. said on Thursday it would cut about 15 percent of its global workforce this year, and projected holiday-quarter results to be well below Wall Street expectations amid weakening demand for its toys and games.
Shares of the maker of Transformers toys fell more than 7 percent to $59.25 in extended trading after the company said it would eliminate about 1,000 full-time positions globally. Rival Mattel Inc. also slipped about 2 percent.
Hasbro said the job cuts would start to take effect within the next several weeks, adding that the reductions were “necessary to return our business to a competitive, industry-leading position.”
Hasbro joins a growing list of companies, ranging from tech majors to banks, to have reduced jobs amid threats of a recession, with the Monopoly maker warning in October that demand was starting to slip ahead of the holiday season.
“Despite strong growth in Wizards of the Coast and Digital Gaming … our consumer products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” CEO Chris Cocks said.
Hasbro estimated a 26 percent slump in revenue from its consumer products segment, compared with a 22 percent jump in its Wizards of the Coast and Digital Gaming business.
“The Q4 shortfall does not come as a total surprise … (but) the magnitude of the shortfall in the Consumer Products business was sort of shocking,” D.A. Davidson Analyst Linda Weiser said.
Hasbro estimated fourth-quarter revenue to fall 17 percent to about $1.68 billion. Analysts on average expect revenue of $1.92 billion, according to Refinitiv IBES data.
The company, which is set to report results on Feb. 16, estimated quarterly adjusted earnings per share of $1.29 to $1.31, lower than analysts’ expectations of $1.48.
Hasbro added that Eric Nyman, president, and chief operating officer, was also exiting the company as part of organizational changes.
By Deborah Mary Sophia