Hasbro, the renowned American toy and game manufacturer best known for Monopoly, Play-Doh, and Nerf, announced a new round of layoffs this week, cutting approximately 3% of its global workforce—about 150 employees—as part of its ongoing cost-reduction efforts. This move comes as the company faces mounting pressure from higher U.S. tariffs on toys imported from China.

As of the end of 2024, Hasbro employed approximately 4,985 people worldwide. The current reduction is significant in scale, reflecting the company’s need to adapt quickly to changing economic conditions and an increasingly challenging business environment. Hasbro still sources about half of its toys and games sold in the U.S. from China, making it particularly vulnerable to trade tensions and newly imposed tariffs.

In an official statement, Hasbro’s spokesperson, Abby Hodes, emphasized that the restructuring is meant to align the organization with its long-term goals. Internal sources say that the company is making considerable efforts to diversify its supply chain, reduce dependency on China, and establish alternative manufacturing and logistics routes.

Economic Backdrop: Trade Wars, Tariffs, and Shifting Market Dynamics

Hasbro’s cost-cutting measures come at a time of escalating concerns within the toy industry, particularly due to rising import costs from Asia and China. The Trump administration has introduced another round of tariffs on various consumer goods, with toys being among the hardest hit. Hasbro CEO Chris Cocks has previously stated, “Tariffs ultimately translate into higher consumer prices, potential job losses as we adapt to higher costs, and diminished returns for our shareholders.”

To navigate these challenges, Hasbro is not only reducing its workforce but also optimizing operational processes, increasing automation in its supply chain, and reevaluating manufacturing and distribution locations. In December 2023, the company announced a reduction of 900 jobs, following an even earlier move to cut 15% of its workforce—demonstrating a persistent commitment to efficiency.

Financial Impact: Trends, Challenges, and Path to Recovery

These restructuring and cost-cutting measures are not just immediate responses to external pressures but part of a broader strategy aimed at ensuring operational flexibility and profitability. In its Q1 2025 financial results, Hasbro reported revenues of $757 million and operating profit of $69 million—an improvement over previous quarters. Beyond its traditional toy business, Hasbro has highlighted growth in digital gaming and licensing, which have become major growth engines in recent years.

However, the company continues to see a decline in revenues from physical toy sales—a trend that has persisted for the past three years. Hasbro is increasing investments in digital content and expanding its international footprint to mitigate its reliance on the U.S. market. The company’s internal efficiency efforts and workforce reductions are designed to maintain profitability, improve cash flow, and strengthen its capital structure.

Risk Management, Investor Reactions, and Future Outlook

Hasbro’s ongoing actions are designed to provide a rapid response to a dynamic business landscape and regulatory pressures. Management emphasizes that, despite the layoffs, the company will continue to innovate and invest in its core brands. The global toy market is undergoing rapid change, and reliance on a global supply chain has made the industry especially vulnerable to geopolitical shifts, price volatility, and trade barriers.

Investors reacted to news of the layoffs with mild declines in Hasbro’s share price, though the strong performance in digital gaming and licensing is viewed as a positive signal for long-term recovery prospects. The company is committed to exploring additional avenues for profitability and maintaining financial stability.

Conclusion and Forward View

Hasbro stands at a challenging crossroads: on one hand, it must contend with tariff pressures, rising manufacturing costs, and fierce global competition; on the other, it has a genuine opportunity for innovation through digital and licensing investments. Balancing operational efficiency, supply chain resilience, and a focus on core business lines will be crucial in shaping Hasbro’s future in the coming years.