Mattel to eliminate 1,000 jobs, dozens at El Segundo site
Mattel Inc., the world’s largest toy company, said Thursday that it was eliminating 1,000 jobs -- including 170 positions at its headquarters in El Segundo.
The cuts amount to about 3% of the firm’s worldwide workforce, according to a company statement. Professional and administrative staff positions are being particularly hard hit -- they’ll be reduced about 8%. Mattel, which would not make executives available for interviews, said in the brief statement that the cuts were being made because of the “current economic environment.”
Analyst Linda Bolton Weiser of Caris & Co. said she was surprised by the job cuts.
“This is a serious move for the company,” Weiser said.
Mattel Chief Executive Robert Eckert, she said, is known for vigorously trying to preserve jobs. “He is not the type to slash and burn,” Weiser said.
She said the company, which had strong earnings the last two years after a somewhat rocky period, has been hampered lately by rising costs of manufacturing in China.
“They needed to offset that with something,” Weiser said.
According to Margaret Whitfield of Sterne Agee & Leach, Mattel executives said in a conference call to analysts Thursday that the company had been working on a plan to reduce costs.
“The economy might have given a little more sense of urgency,” Whitfield said.
In a report issued Thursday on Mattel, analysts for Wedbush Morgan Securities said the company would continue to be plagued by cost difficulties, at least in the near term.
The report said those costs would probably remain high in the fourth quarter before trailing off modestly in the first half of next year.
According to the Mattel statement, the job cuts would be made through a combination of layoffs, retirements, attrition and the elimination of open positions.
The cuts come at a particularly difficult time for Mattel, whose third-quarter profit rose but failed to meet Wall Street expectations. The company continues to be embroiled in an expensive court battle with rival MGA Entertainment and last month issued a statement denying a rumor that its Little Mommy Cuddle & Coo doll, which makes baby sounds, utters the phrase “Islam is the light.”
Shares of Mattel fell 46 cents, or 3%, to $14.52 Thursday.
--
