D&D owners Wizards of the Coast faces work reduction as Hasbro is set to cut 1,100 jobs amid challenging market conditions. Hasbro CEO Cocks cited "weaker-than-expected toy sales" as the main reason behind the decision.
Layoffs Impact Wizards of the Coast as Hasbro Cuts 1,100 Jobs
The layoffs come as part of Hasbro's ongoing efforts to cut costs and enhance profitability. In January, Hasbro already reduced its workforce by 800 people, with the aim of saving $300 million annually by 2025.
Hasbro CEO Christopher Cocks expressed Hasbro's confidence in the future but noted that the current business environment "necessitated additional measures." The layoff process was reported to have already begun, with some affected employees notified or expected to receive notices within 24 hours. The majority of those affected will be informed in the next six months.
The decision comes amid challenging market conditions for the toy industry, with U.S. toy sales down 8% through September and a 10% decline in November compared to the previous year (according to research firm Circana). Hasbro, which previously forecasted a 3% to 5% sales decline, now anticipates a drop of up to 15% for the year.
Hasbro shares have seen a 20% decrease this year. The CEO expressed in his memo the need to "modernize the organization and get even leaner" to ensure Hasbro's stability. "While we see workforce reductions as a last resort, given the state of our business, it’s a lever we must pull to keep Hasbro healthy," wrote Cocks.
Baldur's Gate 3 Reported to Have Contributed Significantly to Growth
Despite the broader decline, Wizards of the Coast (D&D owners and subsidiary of Hasbro) experienced growth. Hasbro's Q3 2023 Financial Report highlighted Baldur’s Gate 3 and Monopoly Go contributions to a significant growth of 40% in the Wizards of the Coast and Digital Gaming segment. However, this growth was unable to offset the overall decline.
"Wizards of the Coast and Digital Gaming delivered a standout performance across strength in MAGIC: THE GATHERING and DUNGEONS & DRAGONS, particularly the blockbuster August release of Baldur's Gate III," as outlined in their Q3 financial report. "Q3 Hasbro, Inc. revenue declined 10% with significant growth in Wizards of the Coast and Digital Gaming segment (+40%) not able to offset the declines in Consumer Products (-18%) and Entertainment (-42%)."
However, this growth did not shield the subsidiary from the impact of the layoffs, as employees have reported their job losses on LinkedIn. Multiple departments, including an art director and a game designer for Dungeons & Dragons, have been confirmed to be affected.
Hasbro Appears to be Investing More in the Video Game Industry
Amid challenges in the traditional games and toys market, Hasbro is expanding its presence in the video game industry. The company's latest venture is the upcoming sci-fi action-adventure RPG "Exodus" which premiered at The Game Awards 2023. Wizards of the Coast's in-house development studio, Archetype Entertainment, is spearheading the project.
Furthermore, Wizards of the Coast granted license to Payday developers Starbreeze for the development of a co-op multiplayer Dungeons & Dragons game currently codenamed "Project Baxter."
As outlined in their financial report, "Effective in the first quarter of 2023, the Company realigned its Brand Portfolios to Franchise Brands, Partner Brands, Portfolio Brands and Non-Hasbro Branded Film & TV. Franchise Brands include DUNGEONS & DRAGONS, Hasbro Gaming, MAGIC: THE GATHERING, NERF, PEPPA PIG, PLAY-DOH and TRANSFORMERS."
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Hasbro Cutting 1,100 Jobs After Sluggish Toy Sales Persist Into Holidays
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Hasbro Q3 2023 Financial Report
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