Danish toymaker Lego has said it is cutting 1,400 jobs – 8% of its global workforce – to counter a fall in sales in Europe and the US.
The privately held, family-owned company with headquarters in Billund, Denmark, announced the move on Tuesday as it reported that its net profits dropped by 3% to 3.4 billion Danish kroner (£420m).
Revenue also fell by 5% to 14.9 billion Danish kroner (£1.8bn), its results for the first half of this year showed.
Lego, which employs 19,000 people across the world, including 900 in the UK, said the job cuts were part of a major overhaul to “reset the company”.
It said those affected by the cuts would be offered redundancy packages and support as they moved on.
Chairman Jorgen Vig Knudstorp said: “We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this.”
He said the firm needed to reduce its costs and the company’s “increasingly complex” business model needed simplifying.
“We are very sorry to make changes which may interfere with the lives of many of our colleagues,” he said.
“Our colleagues put so much passion into their work every day and we are deeply grateful for that. Unfortunately, it is essential for us to make these tough decisions.”
He said the long-term aim is to reach “more children in our well-established markets in Europe and the United States,” and added there were “strong growth opportunities in growing markets such as China.”
The move comes less than a month before Niels Chrisiansen, who headed global industrial technology firm Danfoss for nine years – takes up the role of chief executive at the toy company.
Last month, the maker of the famous coloured building blocks, announced it was replacing its boss Bali Padda just eight months after he took up the role.
Mr Padda was appointed head of the firm in January, but will step down to a “special advisory role” to make way for Mr Christiansen on 1 October.
Source: Sky News