Hasbro to close Providence office, layoff 1,100 people in the next year. What comes next.
PROVIDENCE — The international toy company Hasbro is vacating its Providence office and cutting its staff by 1,100 people, according to a memorandum sent to staff on Monday.
CEO Chris Cocks made the announcement, noting that the layoffs are "especially difficult during the holiday season."
This layoff is in addition to 800 jobs cut in January.
Many of those losing their jobs will be notified within the next 24 hours, while the "majority" of layoffs will happen over the next six months. More cuts will be happening over the next year, with a special focus to "minimize management layers and create a nimbler organization."
People who are laid off will receive "comprehensive packages, including job placement support," Cocks wrote.
There will be "moderate impacts" on employees in Rhode Island, Global Corporate Communications Director Andrea Snyder said.
Hasbro has not yet filed a Worker Adjustment and Retraining Notification, or WARN, with the state, which will likely be required because of the size and number of people impacted by the layoffs. The state's WARN list has not had a new layoff notification since September.
The company will work on its "organizational model" and "standardized" processes in its finance, human resources, information technology, consumer care and "Global Business Enablement project."
Hasbro's six-story Providence office, on Fountain and Sabin streets across from the Amica Mutual Pavilion, will be vacated by January 2025, when the lease ends, part of an effort to "reduce our global real estate footprint," Cocks wrote in the memo.
The Providence office was not being used to its full capacity and the people who work there will be moved to the Pawtucket headquarters, Cocks wrote.
The Pawtucket headquarters is a sprawling mostly one-story brick building on Hasbro Way and Newport Avenue.
Cost-cutting measures, especially in management, were already happening at Hasbro prior to the announcement of layoffs, with a voluntary early retirement program for its U.S.-based employees.
In January, Hasbro announced it would lay off 1,000 employees, 15% of its global workforce, citing a revenue drop in the fourth quarter of 2022 and, like this year, a "challenging holiday" season. Those layoffs in January were intended to save the company $250 to $300 million annually by the end of 2025.
Entering 2023, the market for toys was coming off of "historic pandemic-driven highs" and the "headwinds" the company faced have continued into the holiday season, and are expected to continue into 2024.
"To position Hasbro for growth, we must first make sure our foundation is solid and profitable," Cocks wrote. "To do that, we need to modernize our organization and get even leaner. 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."
In late October, Hasbro and rival toymaker Mattel warned of slow sales going into the holiday shopping season.
In a third-quarter earnings report, Hasbro's revenue declined 10%, as revenue from "consumer products" slipped 18% and "entertainment" fell 42%. Hasbro's game-oriented division Wizards of the Coast and its digital gaming segment posted an 40% increase in revenue, not nearly enough to offset the other declines.
Some of the cost savings will be invested in "new systems, insights and analytics, product development and digital," Cocks wrote, citing possible supply chain efficiency, "direct-to-consumer capabilities" and partnerships to "maximize licensing opportunities."
In August, Hasbro agreed to sell eOne entertainment, a film and TV business, to Lionsgate for $500 million.
Hasbro stock is at its lowest point, $48.76 as of Monday afternoon, the lowest level in a decade.
Hasbro started as Hassenfeld Brothers, Inc., a manufacturer of pencil-box covers from scrap cloth, then pencils, until 1942, when the company started to focus just on toys. In 1952, Hasbro introduced Mr. Potato Head. It was the first toy advertised on network TV and the company's first big hit, spurring its growth.
Hasbro went public in 1968 and acquired rival toy company Milton Bradley in 1984. It has been bumped off the Fortune 500 listing, landing instead on the Fortune 1000 at 585.
Hasbro to close Providence office, layoff 1,100 people in the next year. What comes next.
Hasbro plans to lay off 1,100 employees, in addition to 800 cuts earlier this year, and close its Providence office among slumping sales.
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