Danish toy company Lego has announced it plans to cut 1,400 jobs before the end of the year, a total of eight percent of its workforce.
The company has endured the first drop in global sales in more than a decade. Revenues fell six percent in the first half of 2017 to £1.8bn.
Chairman of the group, Jorgen Vig Knudstorp, said:
We’re very sorry to make changes which may interfere with the lives of many of our colleagues. 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.
As well as the iconic yellow interlocking bricks, Lego has expanded its ranges out to include theme parks like Lego World in the UK and the Lego movie series.
This year’s installment, The Lego Batman Movie, took in $311.8m in the box office.
Has this happened to Lego before?
The last time Lego made such drastic changes to its workforce was back in 2006 when it cut 1,200 jobs and shifted production from Denmark to plants in the Czech Republic and across Eastern Europe.
At the time, Knudstorp said this was necessary to restructure the group’s supply line.
We now see the contour of a new business model, where we go from traditional integrated model to a partnership model. This way we can achieve great financial advantages in a very difficult market.
However, it overcame its struggles to become one of the most valuable brands in the world, according to Forbes. As well, in 2014 it over took US retailer Mattel to become the largest toy company in the world.
Last year, three Lego products were in the top 10 best-selling toys in the UK: the Lego Mini Figures, Lego Disney Mini figures and the Lego Star Wars Millennium Falcon.
According to Statisia, the total revenue of the global toy market is now worth $87.4bn.