Hasbro is laying off 1,100 employees, according to a SEC filing. The company behind franchises like Dungeons & Dragons and Transformers, Hasbro has already been fired 800 employees in January. While some workers will learn the fate of their jobs on Tuesday, others will be cut over the next year. By 2025, Hasbro told shareholders, the company hopes to save about $350 million to $400 million in costs.
Hasbro CEO Chris Cox wrote in a memo to employees — shared in an SEC filing — that it will shift the company’s attention to licensing opportunities, scaling entertainment and “free[ing] increase our own content dollars to drive new brand development.” He blames the company’s losses on unclear “market headwinds.”
Hasbro’s total revenue fell 10% year over year. But Hasbro owns Wizards of the Coast (WoTC), the company that makes Dungeons & Dragons (D&D) and Magic the Gathering, which brings a billion dollars each year. In the part of the company that manages WoTC and digital games, revenues are up 40% year over year to $423.6 million, offsetting operating profit of $203.4 million. Despite this tremendous growth, Hasbro as a whole has struggled. So it looks like Cocks is refocusing Hasbro’s efforts on what really wins the company.
D&D has become increasingly popular in recent years, largely due to third-party content creators such as Critical Role and Dimension 20, where an ensemble cast plays D&D for audience entertainment. The franchise also made a splash this year with a Hollywood film and the hugely successful Baldur’s Gate III, a video game that licenses the Dungeons & Dragons IP. Just last week he beat Baldur’s Gate Game of the Year at the Game Awards.
Hasbro is at a strange crossroads — its toy business is in decline, but it suddenly has an unexpected cash cow on its hands in Wizards of the Coast, which it bought 24 years ago.
“The D&D strategy is a broad four-quadrant strategy where we have this strong brand that has similar recognition to, say, ‘Lord of the Rings’ or ‘Harry Potter,'” Cox said in a call investors last December, which gave us an insight into the company’s plans. However, Hasbro’s attempt to turn Dungeons & Dragons – a game system where groups of players develop their own plot and characters – into something like Harry Potter and The Lord of the Rings, where every fan knows the same characters and stories, is increasing. While the movie “Dungeons & Dragons: Honor Among Thieves” received good reviews when it was released in March, after all was underperforming at the checkout.
“To position Hasbro for growth, we must first ensure that our fundamentals are strong and profitable,” Cocks wrote in the company memo. “To do that, we need to modernize our organization and become even leaner.”
