Habsro, Mattel to lay off workers after Toys R Us liquidation

Hasbro is a giant in the
toy industry.
Reuters/Sandy
Huffaker

It’s a tough time to be in the toy industry.

America’s two largest toy makers, Hasbro and Mattel, aren’t doing
so well in the wake of Toys R Us’ bankruptcy. 

Hasbro, which makes Monopoly, Play-doh, Nerf guns,
Transformers-branded toys, and My Little Pony, said in its
third-quarter earnings report on Monday that sales were down 7%
in the United States and Canada. It also announced a $50-60
million restructuring plan that could result in hundreds of
layoffs.

The layoff will affect a “mid-single digit percentage” of
Hasbro’s 5,000 estimated employees, a Hasbro spokesperson
confirmed to Business Insider.

“As part of Hasbro’s ongoing transformation we continue to
make meaningful organizational changes,” Julie Duffy, senior
vice president for global communications at Hasbro,
said.

“While some of these changes are difficult, we must ensure
we have the right teams in place with the right capabilities to
lead the company into the future.”

Hasbro and Mattel have had to scramble to find new avenues for
selling their toys following the liquidation of Toys R Us earlier
this year. Big-box stores like Walmart and Target usually buy
toys later in the year than Toys R Us did, which caused a
crunch at the end of the third quarter. Hasbro CEO Brian
Goldner said in a conference call discussing earnings that the
company
couldn’t meet all of the demand.

Mattel, which sells Barbie, Hot Wheels, Fisher-Price, and
American Girl brands, announced in July that it would reduce its
global workforce by 2,200 jobs, blaming bad results on lost sales
from Toys R Us’ closure. At the time, the company said its
revenue would have been close to flat if not for the loss of
revenue from Toys R Us.

Mattel announces third-quarter earnings on Thursday.

Toys R Us filed
a motion to liquidate its US business in
March, initiating the closing or selling of all 735 of its US
stores. They all closed for good at the end of June.

Since then, big-box stores like Walmart and Target
have announced new toy-based initiatives for the holiday
season, including offering more options to customers and
having more inventory in new store space cleared just for toys.

In both cases, the new in-store space is permanent. It likely
still won’t make up for Toys R Us’ billions in yearly toys sales,
however.