In a blow to the toy industry, Hasbro has announced they are laying off 1100 employees due to weak sales in the 2020 holiday season. The decision to reduce staff comes after Hasbro’s quarterly financial performance report for the third quarter of the year cited a significant decline in net revenues in the 4th quarter due to “continued challenges in the sector relating to the coronavirus pandemic.”
Despite an overall increase in digital sales, Hasbro’s earnings were affected by a decrease in sales of traditional toys, including board games, action figures, and dolls, resulting in a 2.7% decrease in net revenues. This decrease was seen most notably in the European and infant and preschool categories; however, the pandemic had an impact on nearly all categories, leading to a retreat in traditional sales.
The financial report also noted that despite “retail strength” in the U.S., the combination of pandemic-related store closures and decreased foot traffic in brick-and-mortar stores has resulted in a decrease in sales and a decrease in profitability.
Hasbro is not alone in its struggles; many toy companies are struggling to maintain their profits in the new normal. According to analysis by Fortune, overall toy sales in the U.S. are down 15% this year.
Hasbro is taking steps to remain competitive amid the pandemic, including streamlining certain operations and taking a “significantly reduced” approach to its product portfolios. The company is also looking beyond traditional toy sales and exploring possibilities in digital, e-commerce, experiential resources, and non-toy items, in an effort to diversify and stabilize revenues.
As Hasbro continues to navigate the pandemic’s impact on the industry, the company has stated it is committed to supporting the employees affected by the layoffs and is offering resources such as career transition coaching and job search assistance.