The toy industry is experiencing one of its worst ever financial moments. One of the largest toy companies, Hasbro, announced the layoff of 1,100 workers in the middle of the Christmas season and with all the products intended for this time already on the market.
This represents about 20% of its workforce, based on the information sheet that the company issued a few months ago and where it reported that, until October, the company behind products such as "Transformers" and "Monopoly" had 6,300 employees around the world. As a result of the layoffs, Hasbro shares fell 4% before Wall Street closed on Monday.
The fall, however, does not catch the company's CEO, Chris Cocks, by surprise. He assured, in the memorandum obtained by NBC, that they still expected economic difficulties throughout the remainder of 2023 and even into 2024:
We anticipated the first three quarters to be challenging, particularly in Toys, where the market is coming off historic, pandemic-driven highs. While we have made some important progress across our organization, the headwinds we saw through the first nine months of the year have continued into Holiday and are likely to persist into 2024.
Nor are they the first layoffs made by the famous toy company. Hasbro already laid off about 1,000 employees in January of this year, letting go, at that time, of 15% of its total workforce, as reported by CBS. In terms of income, things are not much better. The company's quarterly report projected a 13% to 15% drop in revenue, and they also don't expect to recover over the next year.
Mattel, also on the tightrope
The other big toy company, Mattel, is also going through tough times. The creator of Barbie, increased its stock market value by 6% this Monday. However, NBC notes, estimates continue to decline. In fact, the company had already warned of the drop in income in October of this year when it saw that it would not reach the "17% gain posted by the S&P 500 so far this year."
All this despite the fact that, reported El País, Mattel had experienced a slight increase in its shares due to the success of Greta Gerwig's feature film, "Barbie." It also detected a small rise in Hot Wheels products. This was relayed in a statement with the company's results, Ynon Kreiz, president and CEO of the company :
Consumer demand for our product increased in the quarter, and we continued to outpace the industry. Our results benefited from the success of the "Barbie" movie, which became a global cultural phenomenon, and marked a key milestone for Mattel.
