Hasbro Inc. will slash 2,200 jobs, or 19 percent of its work force, and close two plants as it moves to expand its offerings of software and electronic toys.
Hasbro will take a pretax charge of $141 million in the fourth quarter to cover costs associated with the job cuts; the plant closings in Tijuana, Mexico, and Ashford, England; and the phasing out of certain underperforming toys.
Much of the manufacturing will be shifted to Asia, where a large number of technology goods are produced. Of the 2,200 jobs that will be cut, about 1,850 are manufacturing positions.
Like many toy companies in recent years, Hasbro has been stepping up its high-tech offerings to make playtime more entertaining and challenging for today's computer-literate kids.
Hasbro has seen tremendous growth in its interactive division, which produces computer and video games, as well as play sets that connect with personal computers.
With today's reorganization, Hasbro said it will be able to better focus on expanding its interactive offerings and building its core brands, such as Tonka trucks, Wizards of the Coast trading cards and Tiger, which produces Furby dolls.
Hasbro also manufactures many of the toys tied to popular entertainment properties, including "Star Wars" and Pokemon.
In addition to the job cuts and plant closings, Hasbro also plans to discontinue some of its toy offerings, including Formula One racing toys, some of its large dolls and a flight simulator, said Hasbro spokesman Wayne Charness.
The company said it expects the restructuring to generate savings of $16 million next year and $23 million a year thereafter. It also expects that its fourth-quarter and year-end earnings will remain in line with Wall Street analysts' expectations.