InDaily InDaily

Support independent Journalism Donate Subscribe
Support independent journalism

News

Lego to cut jobs after sales drop

News

Danish toy maker Lego will cut 1400 jobs, or about eight per cent of its global workforce, after reporting a rare decline in sales and profits in the first half of 2017.

Comments
Comments Print article

The privately held firm said on Tuesday it is now preparing to ‘reset the company,” with a new chief executive due to take over in October with the task of simplifying the business after years of high growth and expansion into new ventures like film.

Revenue dropped five per cent to 14.9 billion kroner ($A3 billion) in the first six months of the year, mainly as a result of weakness in core markets like the US and Europe. Profits slipped three per cent to 3.4 billion kroner.

“We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this,” said Chairman Joergen Vig Knudstorp.

He said the long-term aim is to reach more children in Europe and the United States and added there were “strong growth opportunities in growing markets such as China”.

The company, he said, needs to simplify its business model to reduce costs. Since 2012, the group has built an increasingly complex organisation to support global double-digit growth.

“In the process, we have added complexity into the organisation which now in turn makes it harder for us to grow further,” Vig Knudstorp said.

He told Denmark’s TV2 station that staff cuts would mainly affect administration and sales, not production.

Last month, the maker of the famous coloured building blocks appointed Niels B. Christiansen, who headed thermostat-maker Danfoss for nine years, as its chief executive to replace interim CEO Bali Padda. Christiansen will start October 1.

Based in western Denmark, Lego does not release quarterly figures. The group currently has about 19,000 employees around the world.

– AP

Make a comment View comment guidelines

Local News Matters

Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to help  InDaily continue to uncover the facts.

Contribute here
Powered by PressPatron

Comments

Show comments Hide comments
Will my comment be published? Read the guidelines.

More News stories

Loading next article