El Segundo-based toy maker Mattel announced Wednesday it plans to eliminate more than 2,200 jobs and sell off manufacturing sites in Mexico following a dismal second quarter that saw the company hard hit by the closure of Toys R Us stores.
“Mattel is a company with great potential,” Mattel Chairman/CEO Ynon Kreiz said. “We see a lot of opportunities, but there has been a big discrepancy between our financial performances over the last few years and where the company should be.
“While the industry is evolving, the toy market continues to grow, and we should be able to reverse our own trends given our strong standing and the quality of our assets,” Kreiz said. “With that said, we are in a turnaround and as expected, had a challenging second quarter driven primarily by the Toys R Us liquidation. At the same time, we saw continued strong performance by Barbie and Hot Wheels, and we made substantial progress on our Structural Simplification program to restore profitability and improve productivity in the near-term.”
There was no word from the company on where the job cuts would occur. Mattel has about 28,000 workers worldwide.
The 2,200 affected positions represent 22 percent of the companies “global non-manufacturing workforce,” according to Mattel.
The company reported a 14 percent drop in net sales during the second quarter of 2018, compared to the same quarter last year. Gross sales dropped 11 percent, “reflecting a 10 percent impact from the Toys R Us liquidation.”
Mattel reported an adjusted operating loss of $141.3 million, translating to an adjusted loss per share of 56 cents.
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