D&D General WotC Founder Peter Adkison On Hasbro's Layoffs

Peter Adkison, who owned Wizards of the Coast until it was sold to Hasbro in 1999, oversaw the relaunch of Dungeons & Dragons with D&D 3rd Edition. Today, he commented on this week's round of Hasbro layoffs, which have ripped through WotC. Adkison left WotC in 2000 and currently runs a production company called Hostile Work Environment.

Like many of you, I'm saddened to learn about the layoffs at Hasbro.

Caveat: I have no idea of what’s happening behind the scenes at WotC. If you’re asking who’s at fault, or to what extent it was or was not justified, that’s outside the scope of my knowledge. This post is about my own reflections.

When I read about the layoffs at Hasbro my immediate feeling was shame. Shame for when I did the same thing, at the same company (WotC, before we sold it to Hasbro).

I have made lots of mistakes, tons of them, more than I can even remember. And while I regret those mistakes, and I’m sad for those hurt, I realize it’s part of learning and it’s part of being human.

But layoffs, when handed poorly, or when they are unnecessary, aren’t just mistakes. They are failings of character. Those times when I had a failure of character, those are the moments that haunt me.

 

[Eyes of Nine]

I have a friend who, after many years of building a company from a single-person operation into a well-respected brand in its space, routinely working six days a week, for 10 hours a day, finally sold the company after 20 years. The company was quickly turned into a hollow shell of itself and after the guaranteed period that the former employees would be retained ended, they started getting whittled down.

My friend deserved his rest (and his payday), but once he sold it, he no longer had any control over his creation in any way.

It's a no-win situation.

I spent 12 years building a game/comic store. Sold it, and within 18 months the buyer was closing it down. Then! it got bought by someone else, who then really drove it into the ground and finally shut the entire place down for good. Sad outcome...

 

[haakon1]

Quarterly earnings and tax year both. (Some industries go off the mid-summer fiscal year, so you see a smaller spike then.)

Corporations don’t have to have their Fiscal Year on a Calendar Year basis (Jan. 1- Dec. 31) in the US.

 

[Vaalingrade]

Call me crazy, but the buck should always stop with the executives.

They do.

Millions of them.

Often in the form of bonuses for laying people off and making the line go up for a few hours.

 

[Whizbang Dustyboots]

Wait until you hear what we pay baseball players…

Baseball player salaries are based on the argument that ticket sales and TV ratings are because they're there.

Anyone out there buying a game because Chris Cox theoretically had something to do with it? Anyone?

As an aside, one would need to make $9 million just to afford a home in New York or San Francisco.

My brother has owned homes in both cities -- in nice areas -- in the last 10 years. This is simply untrue. (People have mortgages.)

 

[Whizbang Dustyboots]

Devil's Advocate:
You lay off a bunch of employees, the ones who stay behind (in theory) will work hard and improve your business.

All the studies say that the people left behind have their productivity crater from bad morale and many of them start looking for other jobs.

 

[Sacrosanct]

Baseball player salaries are based on the argument that ticket sales and TV ratings are because they're there.

Anyone out there buying a game because Chris Cox theoretically had something to do with it? Anyone?

My brother has owned homes in both cities -- in nice areas -- in the last 10 years. This is simply untrue. (People have mortgages.)

I was being a bit hyperbolic about needing $9 million, but it absolutely is true that a small home is going for a million bucks there. The same home in a city like Minneapolis goes for $250,000. Here in Portland it goes for $500,000. If debt to income ratio for a mortgage is no higher than 36%, and assuming ZERO other debt (like a car or student loans), and a mortgage of a million dollar home with 20% down is around $7-8000 with tax and insurance, then do the math. You’d have to have a monthly income of about $20,000 with $200,000 down. Again, assuming you had no other debt. So a $250,000 salary gets you a 900 sq ft 1980s home on a small lot in Alameda, and a 900 sq ft apartment in manhattan. But if you’re willing to get a fixer home that’s falling apart, you can find one in Oakland in a risky area for $500,000, so you only need to make $125,000 a year with $100,000 down. Yay? Point being, is it realistic for a CEO of a large corporation to only be able to afford a house no larger or fancier than a modern Brady bunch house? I don’t think so. As much as I’d love to see executive pay decrease, that’s never gonna happen. Especially when 90% of that 9 mil isn’t even pay or bonuses. If a large corporation is trying to find a ceo with a sales pitch “You can afford to live here”, you won’t find very good talent for that job.

 

[Zardnaar]

I was being a bit hyperbolic about needing $9 million, but it absolutely is true that a small home is going for a million bucks there. The same home in a city like Minneapolis goes for $250,000. Here in Portland it goes for $500,000. If debt to income ratio for a mortgage is no higher than 36%, and assuming ZERO other debt (like a car or student loans), and a mortgage of a million dollar home with 20% down is around $7-8000 with tax and insurance, then do the math. You’d have to have a monthly income of about $20,000 with $200,000 down. Again, assuming you had no other debt. So a $250,000 salary gets you a 900 sq ft 1980s home on a small lot in Alameda, and a 900 sq ft apartment in manhattan. But if you’re willing to get a fixer home that’s falling apart, you can find one in Oakland in a risky area for $500,000, so you only need to make $125,000 a year with $100,000 down. Yay? Point being, is it realistic for a CEO of a large corporation to only be able to afford a house no larger or fancier than a modern Brady bunch house? I don’t think so. As much as I’d love to see executive pay decrease, that’s never gonna happen. Especially when 90% of that 9 mil isn’t even pay or bonuses. If a large corporation is trying to find a ceo with a sales pitch “You can afford to live here”, you won’t find very good talent for that job.

It's about 3 years income for an "affordable" house. 6 or 7 stressed.

That means around 333k if houses are 1 million.

At its worse here it was close to 20 years average income to buy house. I could sell up and buy in California, my brother sell up and move to Seattle.

USA is where we were 2015-17. Even deflated USA is 100k+ cheaper on average.

 

[Stormonu]

Perhaps if WotC hadn't bought DnDBeyond to "monetize" it (for $146m), they might have saved enough money to keep those employees that got laid off.

 

[Staffan]

Point being, is it realistic for a CEO of a large corporation to only be able to afford a house no larger or fancier than a modern Brady bunch house? I don’t think so. As much as I’d love to see executive pay decrease, that’s never gonna happen. Especially when 90% of that 9 mil isn’t even pay or bonuses. If a large corporation is trying to find a ceo with a sales pitch “You can afford to live here”, you won’t find very good talent for that job.

CEOs should never make more than 10x what the lowest-paid employee makes. And 2x-3x is more reasonable. And if they were paid more appropriately, housing prices wouldn't be as inflated.

 

[jedijon]

Anything can of course—I’m sure a food could be both tasty AND gross!

So, the answer to your question is this—what would be required to make a situation of terminating an employee be both fiscally responsible and emotionally spiteful? An a-hole volunteering his best staff to get a pink slip in response to his VP telling him to trim the dept 8% by EOY?

Or did you just mean that in general you don’t see a difference between companies hitting their spending targets and spite? Could it be you don’t approve of corporations?