Several outlets including the Providence Journal and WPRI are reporting that Hasbro may be in a tough position. According to a press release from Hasbro’s Julie Duffy, Hasbro is engaged in an ongoing process of transformation involving “meaningful organisational changes”, some of which are said to be “difficult” and may have an affect on a single digit percentage of Hasbro’s 5,000 employees (i.e. between 50 and 499 individuals).
This news has led to many speculating that “difficult changes” affecting this proportion of employees means layoffs, although even this small proportion of layoffs would likely trigger a requirement to file a WARN notice, which the Rhode Island Department of Labor and Training reports has not taken place. This seems to almost certainly be in the wind, though, because there are not many other ways this could be taken.
To some, the difficulty faced by Hasbro might be laid at the feet of the underperformance of Transformers The Last Knight – the fact the movie did not perform to expectations coupled with toys being slow to sell through and many assortments being poorly stocked. This is certainly a factor, but Hasbro sells more than Transformers, and so other elements of Hasbro’s business also underperforming – such as Star Wars – will also play a major role. Moreover, Hasbro’s business has almost certainly been hurt by the collapse of Toys R Us, which will have left them with unpaid invoices, and these funds will need to be recouped somewhere. Plus, toys overall do not sell to the same degree that they did even ten years ago due to the ubiquity of smart devices competing for the attention of Hasbro’s customers.
To add to Hasbro’s woes, both Providence Journal and Go Local Prov News report that, separately, Pomerantz Law Firm and also Rosen Law is launching an investigation of Hasbro, focusing on whether Hasbro engaged in securities fraud or other unlawful business practices. Marketwatch suggests that the particular issues in the Rosen suit are that Hasbro intentionally underreported the issues facing Toys R Us in the months leading up to its bankruptcy and closure, and also that adverse sales in the UK and Brazil were also not disclosed. Hasbro have denied that their “difficult changes” are related to these investigations.