Unconfirmed: More Layoffs at WotC

[mudbunny]

If D&D was going down in flames, they'd cut bait and sell. Holding on to it would result in further losses.

The value of D&D as a game is dwarfed by the value of D&D as an IP. If D&D was going down the tubes, it is unlikely that Hasbro would sell it off. Rather, they would simply shelve it and wait for it to become valuable again.

 

[Jdvn1]

b) it is possible to estimate the impact statistically, across large numbers of companies that have had layoffs;
c) when such analysis has been done, it has found that layoffs typically lead to bad results for the companies that do them;

This simply isn't true. Layoffs typically come after or during bad periods or possibly in anticipation of bad periods. Research has shown that such layoffs increase productivity, reduce costs, and end up in relatively good results. And, it's good that research shows this, because it backs up the theory as well. Layoffs are a necessary evil to ensure long term success. The most obvious case in point--the US economy. We suffered massive layoffs, but as a result we've been able to start recovering, and job creation last month was at a four year high. It's a similar story for every recession at every developed country.

The arguments advanced for why the layoffs "must be" improving WotC's bottom line could be applied to any sizeable company that lays people off. Hence, if such arguments were valid, we should see layoffs improving the bottom lines of most companies that do them. In fact, the opposite is true.

In fact, we see the bottom lines of most companies improving.

 

[Jdvn1]

The value of D&D as a game is dwarfed by the value of D&D as an IP. If D&D was going down the tubes, it is unlikely that Hasbro would sell it off. Rather, they would simply shelve it and wait for it to become valuable again.

The value of D&D as an IP and the value of D&D as a game are each part of the overall value of D&D. Hasbro certainly has a dollars-and-cents valuation of D&D in the short and long terms, and if the overall value of D&D is going down, they're losing money, and they're better off selling.

 

[Jdvn1]

The value of D&D as a game is dwarfed by the value of D&D as an IP. If D&D was going down the tubes, it is unlikely that Hasbro would sell it off. Rather, they would simply shelve it and wait for it to become valuable again.

The value of D&D as an IP and the value of D&D as a game are each part of the overall value of D&D. Hasbro certainly has a dollars-and-cents valuation of D&D in the short and long terms, and if the overall value of D&D is going down, they're losing money, and they're better off selling.

 

[Herschel]

I'm not surprised that WotC is showing the same amount of respect and consideration to it's employees as it has to it's customers. They have done more than enough things in the past to warrant a boycott. Now they definitely deserve to be boycotted. Consider my DDI subscription cancelled.

Layoffs happen, whether or not a company or line is doing well. Large companies reallign regularly, meaning often people get squeezed out. Other times, people get a better offer and leave. One of these cases is likely true. Which one is pure speculation and it's funny but it appears the majority of people saying layoff are 3E fans and a large chunk of those refuting are 4E fans.

Edited out the belligerent parts. We've asked to keep the discussion civil; trying to incite flames doesn't help that.

 

[Jdvn1]

Without any specific report or press release, about the closest thing we have to "hard data" on the health of the company is through the stock exchange. According to this link, Hasbro stock is up 2.83% from yesterday, closing at 42.42. Not too bad...not stellar, but fairly solid.

Of course, this is for Hasbro, Inc. as a whole, not Wizards of the Coast LLC specifically.

There are some other hard numbers in your link.

Net Profit Margin 8.77%, for example, as well as links to more information.

 

[Jdvn1]

Without any specific report or press release, about the closest thing we have to "hard data" on the health of the company is through the stock exchange. According to this link, Hasbro stock is up 2.83% from yesterday, closing at 42.42. Not too bad...not stellar, but fairly solid.

Of course, this is for Hasbro, Inc. as a whole, not Wizards of the Coast LLC specifically.

There are some other hard numbers in your link.

Net Profit Margin 8.77%, for example, as well as links to more information.

Also, 2.83% on the day is a) beating the rest of the market by a lot (which is pretty stellar) and b) unreliable, since stocks fluctuate wildly.

 

[Fifth Element]

"The increase in gross profit in dollars was more than offset by increased product development and sales and marketing expenses related to investments the Company made in both core brands and its digitial initiative related to its Wizards of the Coast subsidiary..."
(bad)

We don't know enough to say this is bad. Investing in a product line can increase future profits. It hurt the bottom line that year, but doesn't tell us about any future positive effects.

"The Company expects amortization expense to decrease in 2010 primarily as a result of the property rights related to Wizards of the Coast becoming fully amortized in the fourth quarter of 2009."
(good)

This one is neutral. Amortization is an accounting concept, and has nothing to do with whether a product line is successful or not.

So, really, this is a small amount of information regarding the health of D&D, though the D&D digital initiative probably didn't help.

We don't know if they digital initiative has helped, since we don't know its costs or revenues. There have been failures and successes in that arena.

 

[Azgulor]

Can't we cite the generous severance packages received by those laid off as a sign of WotC's and D&D 's profitability?

A sign of WotC profitability? Perhaps yes. It's likely even. However, there may be other determining factors.

A sign of D&D profitability? Definitely no.

Note: I'm not saying D&D isn't profitable. It's just that WotC is not going to have multiple HR organizations & policies for product lines. Therefore, whatever HR-policies apply (such as severance packages), would apply to employees of the company as a whole.

There may be (and almost certainly are) variances based on employee type (e.g. executive vs. management vs. full-time salaried employee).

 

[Jdvn1]

We don't know enough to say this is bad. Investing in a product line can increase future profits. It hurt the bottom line that year, but doesn't tell us about any future positive effects.


This one is neutral. Amortization is an accounting concept, and has nothing to do with whether a product line is successful or not.


We don't know if they digital initiative has helped, since we don't know its costs or revenues. There have been failures and successes in that arena.

That's true. I'm using "good" and "bad" very loosely, to imply that, in the absence of other information, a cost is "bad" and less cost is "good." It certainly doesn't imply anything overall about the overall story or the longer term story.