Sept. 5 (UPI) — LEGO said Tuesday it plans on 1,400 job cuts, as the toy-maker’s half-year revenue is down 5 percent from last year.
The news comes off a nearly decade-long period of growth for LEGO, where the company had become the world’s most profitable toymaker and the second-largest by sales. The toy manufacturer has long been able to compete with competition from cellphone apps and video games.
LEGO said it intends to reduce its workforce by 8 percent but plans to provide affected workers with redundancy packages — including additional support in transitioning to new positions or new opportunities outside of the company.
Chairman Jørgen Vig Knudstorp said, “We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this. We are working closely with our partners and we are confident that we have the long-term potential of reaching more children in our well-established markets in Europe and the United States.”
LEGO said it plans on simplifying its organization, a turnaround from the complex organization that had been built over the past five years.
Hitting the reset button will be part one of a two-part change for the organization. LEGO said it plans to target more children to aid their growth by adjusting their marketing and product development formulas.
Knudstorp said the company intends to immerse physical play and digital technology.
“We will find more opportunities to engage with kids and parents including innovative ways,” he said. “We have a powerful and loved global brand, a strong business and are confident we can reach more children around the world.”