Mattel to Cut 2,200 Jobs

The toy industry has seen some major shakeups over the past year, and the latest shift comes from longtime toymaker Mattel.

The company announced today that it would be cutting 2,200 jobs as part of its cost savings program, and with the news shares of Mattel went down more than 8% (via CNBC). Mattel previously announced its cost savings plan last year, but at the time Mattel only announced the closure of its New York office, which affected around 100 jobs.

Now over 2,000 jobs will be affected, resulting in a loss of 22 percent of Mattel’s global non-manufacturing workforce according to the company. It isn’t known if this was always part of the cost savings plan or was a more recent update to it, but the company hopes to eliminate around one-third of its $650 million debt this year, and this is likely a big part of making that happen. Mattel is also selling several manufacturing factories in Mexico as part of the cost savings.

Multiple factors have a part to play in Mattel’s issue, including most recently the closure of Toys “R” Us. The toy store chain had an impact not just on Mattel but also Hasbro and every other toy distributor, though there are hopes Kay Bee coming back will help fill that void.

Back when the announcement to close Mattel’s New York office was made, company spokesman Alex Clark said “Decisions like this are never easy, but we are committed to taking steps to ensure our real estate footprint is fully aligned with our efforts to ensure our operations are run as efficiently as possible. Importantly, this move enables us to simplify our organization, bringing teams closer together, encouraging more direct collaboration and facilitating faster decision making.”

Mattel CEO Margo Georgiadis spoke of starting 2018 with a clean slate in the previous announcement, saying “We have taken aggressive action to enter 2018 with a clean slate so that we can reset our economic model and rapidly improve profitability.” On a recent company earnings call, Georgiadis added: “Our fourth-quarter performance reflects a tough quarter as part of what was a difficult and extraordinary year for Mattel.”

Popular brands like Barbie, Hot Wheels, Polly Pocket, MEGA, American Girl, Thomas & Friends, Fisher-Price, WWE, Monster High, and DC all fall under the Mattel umbrella, so any type of closer or selling would have large ripple effects across the industry. Hopefully, it will not come to that and Mattel can rebound over the next few years.