Hasbro has announced that it will be laying off 15% of its global workforce, a total of more than 1,000 jobs. Posted as a piece of investor news on January 26, the company cited underperformance of Consumer Products in the fourth quarter. Compared to that, Hasbro's gaming divisions were the ones that saw growth, leading to decisions for its directions in the wake of these layoffs.
Hasbro is the global entertainment company primarily known for owning toy franchises like Transformers, G.I. Joe, and My Little Pony. The company also operates a gaming division, including Wizards of the Coast, which manages properties like Magic: the Gathering and Dungeons & Dragons.
Per Hasbro's January 26 report, that gaming division was the only part of the company to merit mention of "strong growth" in the quarter, with a 22% year-over-year increase. Every other component of the company, however, dragged revenue down, for a 17% overall loss.
With the success of the gaming divisions in mind, Hasbro has announced a new plan, titled by CEO Chris Cocks as "Blueprint 2.0." Those 15% layoffs are an opening component of this plan, which seeks to narrow Hasbro's focus to fewer brands, including more priority placed on gaming and digital elements. On top of this, president and chief operating officer Eric Nyman will also be departing Hasbro.
While Hasbro's pivot to more fucus on gaming makes sense in the wake of that posted growth, that area hasn't been without its own stumbles. Hasbro and Wizards of the Coast recently initiated a controversy with their plans for the new Open Gaming License (OGL) of Dungeons & Dragons. That decision on the famous tabletop role-playing game system saw protests from across the community and cancelations of paid online D&D accounts. Only recently in response to that outcry did Wizards of the Coast reverse course, informing the community that it would be leaving the previous version of the OGL in place.
Given the growth in the gaming division, plus an upcoming Dungeons & Dragons feature film that Hasbro is banking on, it makes sense that the company would want to placate that fan base moving forward. The company will also see a new game based on its Transformers property, titled Transformers: Reactivate, released some time in the future. However, these pivots to potentially-profitable areas for the company can't help the short-term cost-cutting measures from the end of this last quarter. The unfortunate employees who were laid off were caught in the crossfire of the failures of Hasbro's overall short-term profit aspirations.