Economy

Lego cuts 1400 jobs as its sales hit a brick wall

Lego cuts 1400 jobs as its sales hit a brick wall”

Lego Group chairman Jorgen Vig Knudstorp said: "We are very sorry to make changes which may interfere with the lives of many of our colleagues".

Over the past dozen years, Lego A/S has snapped together sales growth with construction sets ranging from Elsa's sparkling ice castle to the "Star Wars" Imperial Assault Hovertank - as if game consoles and smartphones had never invaded the playroom.

Revenue in the first half fell 5% to 14.9bn Danish krone as weaker demand in the group's established markets of the U.S. and parts of Europe offset double-digit percentage growth in China.

A Lego spokesperson declined to comment on where the jobs would be cut, but the company said a majority of the 1,400 positions will be gone before the end of the year.

One of the great turnaround stories of the past decade has come unravelled as today Denmark's Lego announced a decline in revenues and plans to eliminate 1,400 jobs.

Despite the growth in China, Lego still saw an unexpected drop in results. Profits slipped 3 percent to 3.4 billion kroner ($544 million).

Lego now employs around 900 staff in the UK.

The company, he said, needs to simplify its business model to reduce costs.

"The Lego Batman Movie", an animated film featuring the superhero and the company's bricks, hasn't generated the sales of spinoff merchandise that Toys R Us or Lego expected, he said.

Lego admitted that the organisation had become too complex over the past five years, due to its rapid expansion, to support future global growth.

"In the process, we have added complexity into the organization which now in turn makes it harder for us to grow further", Knudstorp explained.

Knudstorp said: "We believe our most important contribution to society is through creative LEGO play experiences, as play is critical for children's learning and development". Christiansen will start October 1.

According to their most recent press release, the LEGO Group's revenue for the first half of 2017 is 5 percent down compared with the same period in 2016.



Like this

loading...
loading...

Latest


06 September 2017
Rally drums up support ahead of abortion clinic hearing
Kentucky's lone abortion clinic is bracing for a legal fight against health regulators and the state's anti-abortion governor. The clinic is arguing that there is no medical justification for the law, and that it infringes on constitutional protections.

06 September 2017
Man says UPS delivery 'trapped' him inside apartment
From the picture, it seems that since the outside handle on the door can't go all the way down, the door can't be opened from the inside.

06 September 2017
Chinese universities move up in global ranking
Times Higher Education , a leading British magazine, used 13 performance indicators to rank 980 universities from 77 countries . On top is the University of Oxford , followed by University of Cambridge and the California Institute of Technology.

06 September 2017
Microsoft Details Mouse and Keyboard Support on Xbox One
Not in terms of drivers and functionality, the Xbox One runs a version of Windows 10 after all, but in the implication. Players are adept at both functions and Microsoft will also base their development on player comments and input.

06 September 2017
Media Won't Talk About Democratic Sen. Bob Menendez's Corruption Trial
In March of this year, the Supreme Court rejected a motion from Menendez that sought to block the case from going to court. Bob McDonnell's federal bribery conviction, laying out a narrow definition of what constituents an "official act".

06 September 2017
Leeds United Director of Football makes admission that will surely excite fans
Leeds United still have the opportunity to sign summer target Reto Ziegler. Yes, according to the club's director of football Victor Orta .

06 September 2017
Aveva Group Unveils Software Tie-up With Schneider Electric
The merged group said it was in the process of seeking a new chief executive with experience of running a global software business.

06 September 2017
Bitcoin falls after PBoC bans initial coin offerings
China is the world's largest cryptocurrency market and ICOs have raised about $400 million worth of investment there. The growth and popularity of ICOs has presented challenges for regulators, who seek to mitigate unnecessary risks.

06 September 2017
Rihanna's Makeup Line Will Feature 40 Shades Because Black Beauty Matters
Just take a look at the (dreamy AF) Killawatt Highlight Duo below, shown in shades Ginger Binge and Moscow Mule. Fenty Beauty, Rihanna's make-up line, is telling you that you don't have to be the same all the time.

06 September 2017
Swiss invent new pink chocolate
No berries, berry flavor or color is added to ruby chocolate, which Barry Callebaut introduced in Shanghai Sept. 5. Those aren't adjectives we'used to hearing describe chocolate, so we're certainly curious.