The Danish toymaker, Lego is planning to cut 1,400 jobs before the end of the year in a bid to scale back the 85-year-old business after suffering its first drop in sales in more than a decade.
The report of a 5-percent decline in mid-year revenue came a month after Lego abruptly removed its chief executive, suggesting the company is facing its biggest test since flirting with bankruptcy in the early 2000s.
Lego said Tuesday that its revenue for the first half of this year fell 5 per cent from a year earlier to US $2.4 billion, its first revenue decline in 13 years. Net profit fell 3 per cent to US $544 million.
“Unfortunately, it is essential for us to make these tough decisions,” Chairman, Lego, Jorgen Vig Knudstorp said in a statement. “We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this.”
Lego said it will cut approximately 1,400 positions – including up to 600 at its headquarter in Billund, Denmark – the majority of them before the end of 2017. The company currently employs some 18,200 people.