In the middle of the pre-Christmas peak season, well-known toy manufacturers have announced massive job cuts. The US industry giant Hasbro, publisher of the board game Monopoly, among other things, is cutting 1,100 jobs, which corresponds to one in five jobs in the company. The wooden toy manufacturer Haba, based in Bad Rodach in northern Bavaria, which has slipped into bankruptcy, is also cutting 450 jobs in the short term. The reasons for the layoffs at both brand companies are very different.
In an email to employees, Hasbro boss Chris Cocks blamed the weaker than expected Christmas business. Although fewer sales were expected in the current Christmas business following growth during the pandemic, the headwind will continue to blow into 2024. Of the 1,100 jobs that Hasbro is cutting, 200 are due to cuts that were announced at the beginning of 2023 but have not yet been fully implemented. In addition to board games like Monopoly, Hasbro also makes Play-Doh dough and characters like My Little Pony and Transformers.
Hasbro is not an isolated case in that many toy manufacturers are currently struggling. Your business, which grew disproportionately during the Corona lockdowns, is now declining again. Added to this are the effects of inflation and general purchasing reluctance. In Germany, experts assume that total toy sales will fall by 200 million euros to 4.5 billion euros this year. All major brands are reporting declining results for the current year.
Jobs are also being cut at Playmobil
Most recently, Playmobil announced that it would cut 700 jobs worldwide, 370 of them in Germany. However, the same applies to the Franconian plastic figurine producer as to Haba, the long-leading German wooden toy manufacturer: the problems are less of an economic nature, but rather of a home-made nature. The Haba family business, founded in 1938, which also produced textiles and furniture for children, ran a special online store called Jako-o and a daycare, school and home outfitter with the Wehrfritz brand, has, according to experts, become hopelessly bogged down. With too many activities beyond just the store, but also with a range that specialist retailers say is too extensive and too novelty-driven. In addition, successful products are not sufficiently maintained. In addition, there were delivery difficulties lasting months after a failed IT changeover in the company. In mid-September, the company applied for self-administration insolvency proceedings at the district court in Coburg.
For Nicole Ehrsam, first representative of IG Metall Coburg, it is clear that “serious management errors and megalomania” have plunged Haba into crisis. “Millions were burned every month. Above all, a former managing director was allowed to act unchecked, which led, among other things, to the purchase of completely oversized and very expensive software,” Ehrsam told the SZ on Tuesday.
While the founding and owner Habermaas family has been publicly on the move for months, management and employee representatives negotiated the modalities for the downsizing that was inevitable after a massive drop in sales. “Future Pact 2030” is the title of the agreement that was presented on Tuesday in Bad Rodach. At the beginning of the negotiations, Haba management wanted to cut 700 of the 1,677 jobs in Germany. Now 450 layoffs are being announced. However, this number is distorted because, according to Nicole Ehrsam’s estimate, more than 100 Haba employees have left the company of their own accord since September.
The children’s furniture factory is sold
The 450 Haba employees who are now being laid off can move to a transfer company for six months. There they are offered the opportunity to gain qualifications and reorient themselves professionally. Most employees will move to the transfer company on January 1st, and some logistics employees will move to the transfer company on March 1st, 2024. Along with the job cuts in Bad Rodach, Haba is selling the children’s furniture factory in Eisleben (Saxony-Anhalt) to Mansfeld Anlagenbau und Umwelttechnik AG, a mechanical engineering company, on January 1, 2024. Nothing was announced about the purchase price. 70 of the approximately 100 employees will be taken over, as will the real estate and the machinery. Those who lose their jobs in Eisleben can also switch to the transfer company. The plan, which was announced before the bankruptcy filing in August, to cease business operations of the former Haba flagship brand Jako-o at the end of the year is being maintained.
“From the perspective of the employee representatives, the result is the best possible result under the given circumstances,” says Nicole Ehrsam from IG Metall. The current management is now expected “to steer Haba back into calmer waters, because it was never due to the products and their quality,” said Ehrsam. Mario Wilhelm, acting Haba managing director, spoke on Tuesday about a “Future Pact 2030” that had been decided. To this end, “all areas of the company were put to the test and the processes there were questioned”. Martin Mucha, who acts as general representative of the Grub Brugger law firm at Haba, noted “great progress” in the ongoing self-administration process, so that “a robust concept for the coming years could be presented to the creditors’ committee.” He is therefore “confident that we can successfully complete the insolvency proceedings by March 2024”.