Hasbro Looks To Cut More Costs To Offset Slumping Sales

by Jay Cochran
February 29, 2024
In a new article from the WSJ, Hasbro's Chief Financial Officer Gina Goetter stated that the company will be increasing efforts to cut costs within the company more aggressively in order to help compensate for slumping sales. Revenue at Hasbro fell 15% in 2023 to $5 billion as demand in the toy market softened due to things like rising inflation. This month they announced that they have increased their 2025 cost-savings goal from $350-$400 (Which is what they announced the goal would be 2 months ago) to $750 million.

This effort has started in their game division and will expand to other product brands throughout 2024.

“We’re not just talking about nickels and dimes,” Goetter said. “We’re talking about material moves that we can make on product costs.”

The article doesn't talk much about action figures but it does use Hasbro's Nerf brand as an example. They state that Hasbro has identified 40 cost-savings ideas for that brand that include things such as the thickness of the plastic it uses to the type of packaging. Hasbro states that if they adopt just 8 of the largest ideas to cut costs for Nerf, it will save them $10 million.

Other actions Hasbro has taken recently to cut costs at the company include the announcement late last year where they stated that they would be cutting roughly 20% of it's workforce in 2024, which translates to roughly 1100 people. Hasbro is also looking to lower vendor costs and increase efficiency across its supply chain.

Hasbro also has begun shifting their less profitable brands to a licensing model which means instead of making the product themselves and carrying that inventory on it's books, they are allowing other companies to pay them for the privilege of making the stuff. Examples given in the article for this included Easy-Bake Oven and FurReal Friends.

As I said, this article doesn't really focus much on the action figures that are produced in large part for adult collectors these days. In fact Hasbro has previously stated that things like Transformers experienced a %25 full year growth in 2023 and G.I. Joe has been mentioned as doing well for them as well. Still you have to wonder overall how these cost saving measures Hasbro plans to implement will effect in terms of quality and availability the stuff we the adult collector buy from them?
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RobertD - 2024-02-29 @ 5:57 pm
59 minutes ago, Jscott991 said:

My organization does almost this exact kind of production (a high quality 30-60 minute streaming broadcast using a combination of Zoom and Youtube). They cost more than $10,000 each in production alone. If just two or three people's salaries are focused only on these Fanstreams (and several of these brand managers do very little else -- I won't name names), the savings start to add up.

They are just a total waste of money. GI Joe is having one right now and they already released all the preorders and pictures. What is the point?

I'm the production manager of a news station, this stuff is literally my day-to-day. Again, once the equipment cost is handled (and equipment is admittedly expensive), it costs virtually nothing to do this stuff. One person with a switcher can handle the broadcast itself, though I'm going to assume there's probably a PA on the floor and probably a (not terribly good) audio Op. Though most modern switchers put audio in the hands of the director so it's fairly questionable if that's even a separate body. Not sure how your organization costs anywhere near that much per production unless you have to rent equipment, (or if I'm misunderstanding you, and your organization CHARGES other companies 10K to do this stuff for them, which is obviously a whole different ball of wax) but once the overhead is internalized all you're paying for is the power bill and small handful of people to do a little work for an hour or two. Hasbro's sets are already built and lit, there's little camera movement so most of those are set and forget, and they were probably smart enough to purchase their equipment since that's far more cost effective if you're going to work in volume (who builds a set but doesn't own their cameras?). Since they've been doing these streams for a few years now, I'm willing to bet all that overhead is long since absorbed. It's pretty much a waste of money to have sunk all that cash into these productions and not continue to do them.

As for what the point is, that seems pretty obvious. They do these to generate buzz and excitement in their brands. How well that goes is a "your mileage may vary" situation, but I'm sure you can appreciate that a presentation/demonstration is generally going to be more interesting than a press release.

marionlawless - 2024-02-29 @ 4:08 pm

Gina Goetter makes $1 million dollars a year. They should cut CEO pay.

Jscott991 - 2024-02-29 @ 4:07 pm
6 minutes ago, RobertD said:

It is no where near that expensive to run a fanstream. Especially since all the overhead (studio, equipment) is already in place. Between the setup and actual filming, it's literally just paying a handful of people for a few hours of their time. Sometimes clearly not even very experienced people, as evidenced by the audio issues in the latest Legends stream.

My organization does almost this exact kind of production (a high quality 30-60 minute streaming broadcast using a combination of Zoom and Youtube). They cost more than $10,000 each in production alone. If just two or three people's salaries are focused only on these Fanstreams (and several of these brand managers do very little else -- I won't name names), the savings start to add up.

They are just a total waste of money. GI Joe is having one right now and they already released all the preorders and pictures. What is the point?

RobertD - 2024-02-29 @ 3:58 pm
34 minutes ago, Jscott991 said:

Cut the Fanstreams. They have to waste seven figures on those things and they add absolutely no value. Mattel doesn't do them. McFarlane doesn't do them. NECA doesn't do them.

It is no where near that expensive to run a fanstream. Especially since all the overhead (studio, equipment) is already in place. Between the setup and actual filming, it's literally just paying a handful of people for a few hours of their time. Sometimes clearly not even very experienced people, as evidenced by the audio issues in the latest Legends stream.

Jscott991 - 2024-02-29 @ 3:14 pm

Cut the Fanstreams. They have to waste seven figures on those things and they add absolutely no value. Mattel doesn't do them. McFarlane doesn't do them. NECA doesn't do them.

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