WotC Layoffs - Rob Heinsoo, Logan Bonner, and Chris Sims

[ggroy]

I agree, I think it is a poor business model and one that they should work to eliminate. Keeping quality staff should be one of the priorities of any business.

The question is whether Hasbro/WotC considers game designers/developers as "quality staff" and/or for that matter, whether they believe all game designers/developers are more or less replaceable with one another in a "commodity" like manner.

 

[Mustrum_Ridcully]

I agree, I think it is a poor business model and one that they should work to eliminate. Keeping quality staff should be one of the priorities of any business.

Hmm, that reminds on a recent post on CM about materialism vs idealism. Sure, if it was their free choice, they would keep every capable employer they ever got. Doesn't mean they can.

 

[Plane Sailing]

that as a publiclly traded company, Hasbro is legally forced to maximize profits.

Is that strictly true? If so, over what timescale? I know several non-publicly traded companies which had an accountant take over the CEO job and they became completely focussed on profits with a one-year horizon and they all died a few years later (one of them had ~15,000 employees!).

"Maximising profits" rather than maximising profitability sounds like a very short term approach.

I'm guessing that I'm probably misunderstanding you here?

Cheers

 

[ggroy]

Is that strictly true? If so, over what timescale? I know several non-publicly traded companies which had an accountant take over the CEO job and they became completely focussed on profits with a one-year horizon and they all died a few years later (one of them had ~15,000 employees!).

"Maximising profits" rather than maximising profitability sounds like a very short term approach.

I'm guessing that I'm probably misunderstanding you here?

I suspect it is highly dependent on who are the largest shareholders of a company. For huge large-cap companies which are publicly traded on the NYSE and other stock exachanges, many such companies' largest shareholders are institutional investors such as mutual funds, index funds, pension funds, etc ... For example, here's a list of Hasbro's largest shareholders:

HAS: Major Holders for HASBRO INC - Yahoo! Finance

For such large institutional shareholders, returns on their investment portfolios are probably their main focus and very little attention on the companies' products and services, unless something drastic happens to the balance sheet (ie. such as the Exxon Valdez disaster, the Union Carbide disaster at Bhopal, asbestos, big lawsuits against tobacco companies, etc ...).

 

[Mustrum_Ridcully]

Is that strictly true? If so, over what timescale? I know several non-publicly traded companies which had an accountant take over the CEO job and they became completely focussed on profits with a one-year horizon and they all died a few years later (one of them had ~15,000 employees!).

"Maximising profits" rather than maximising profitability sounds like a very short term approach.

I'm guessing that I'm probably misunderstanding you here?

Cheers

I think it is as much true as any decision-maker in the company wants to. If the stockholders care for short-term interests, that's what the company will strive for (or trying to get rid of those stock-holders). Some have no interest in long-term success if they can get short-term results. Others care more for long-term success, maybe not even motivated by financial gains overal but also by "soft" values like "tradition".

But that might not really be relevant to WotC. Christmas layoffs are not the nicest things to do, even if cushioned with decent severence packages and all. But it doesn't seem as if the decisions for WotC are bad. There is no indication that different decisions would make it better. We just don't have this kind of information or insights into their business. We can only react on an emotional level.

 

[AllisterH]

Is that strictly true? If so, over what timescale? I know several non-publicly traded companies which had an accountant take over the CEO job and they became completely focussed on profits with a one-year horizon and they all died a few years later (one of them had ~15,000 employees!).

"Maximising profits" rather than maximising profitability sounds like a very short term approach.

I'm guessing that I'm probably misunderstanding you here?

Cheers

While that is partly why we currently are in the mess we are in (too much shortsighted thinking), I don't believe this is the same thing here.

Legally, executives found to be purposely tanking a publicly traded company can be brought to court by shareholders.

re: WOTC

Keep in mind WOTC only published 1 D&D book per month (and people were complaining this was an aggressive schedule). Unless every year you increase your audience (and RPGs seem to be a mature industry for D&D. Up and comers like Paizo and Green Ronin have room to grow) and thus sell more book every year (which again many people already think WOTC has an aggressive release schedule) long term employees cost you more than hiring either new employees or the even cheaper, freelancer. You can see this with Darksun specifically and artists in general. Brom, I might guess, is WAY more expensive than he was (even factoring in inflation) than when he was first doing DS

Unless you're ramping up for a new edition (thus need new designers to either handle the current stuff or work on the new stuff), what exactly are you doing with the excess staff.

There's also another factor I think people are forgetting.

The new talent.

If you're WOTC and you only produce 1 book per month and you see a new person with great talent out there how exactly do you get them on your payroll??

 

[catsclaw227]

In past years has WOTC shown a decrease in sales of products when they have had developer/designer turnover due to layoffs?

If there hasn't...

1. Been a noticible drop-off in sales for products that were already in the pipeline
2. Been noticable changes in quality that affected sales of products developed after the layoffs

...then there's no indication (from a shareholder perspective) that the annual process of layoffs has jeopardized the business.

The question is, then, do the shareholders even know about the layoffs beyond a line-item in a report? i.e. do they see the names and recognize their impact in the industry and care about the layoffs to a point that it rolls up to higher management and therefore affects change?

I am sure most everyone hates the idea of layoffs from a human perspective, but most people simply chalk it up to the economy and a necessary evil to allow companies to survive.

I bet there are a lot of other services and products I use that were developed by companies that had to lay people off this year. I guess care about the layoffs of the people at WOTC more than others because I am familiar with the individuals and I am a big fan of the hobby in general.

 

[Umbran]

... as a publiclly traded company, Hasbro is legally forced to maximize profits.

I am pretty sure this is not true as stated.

A company, and it's board of directors, have several legal responsibilities. Specifically, they must act in good faith to do what they think is best for the company. This may not be short-term maximization of profits.

 

[TerraDave]

Can it really be good HR policy to lay people off, from not very big teams, almost every single year?

Oh well, they are joining a fairly exclusive club, though that may not be much concilation.

A company, and it's board of directors...must act in good faith to do what they think is best for the company.

This is correct, and what is good for the company can be interpreted quite broadly.

 

[czak]

Can it really be good HR policy to lay people off, from not very big teams, almost every single year?

Oh well, they are joining a fairly exclusive club, though that may not be much concilation.



This is correct, and what is good for the company can be interpreted quite broadly.

Up here in Canada, what is 'best for the corporation' is very broad. A board of directors does not have to maximize short term profits, or profits at all. In considering what is best for the corporation they are entitled to weigh the interests of: "the interests of shareholders, employees, suppliers, creditors, consumers, governments and the environment" - Peoples Department Stores (Trustee of) v Wise, [2004] 3 S.C.R. 461, 2004 SCC 68. So long as the directors weigh these potentially conflicting interests in a fair and reasonable manner, the courts won't interfere - BCE Inc v 1976 Debentureholders, [2008] 3 S.C.R. 560, 2008 SCC 69.


Of course you folks in the US will have a different statutory set up and different common law. I don't think we've forked that drastically yet...
*goes back to studying for is corporations final*