Weak Sales Will Mean Job Cuts at Lego

Danish toy maker Lego Group plans to slash its work force by up to 10% as electronic toys cut deeply into sales of its famed interlocking plastic building blocks. The privately held company said it expects to report a loss for 1998, its first since its founding in the 1930s. In a statement to the company’s 10,000 employees, Lego Chief Executive Kjeld Kirk Kristiansen said the plan to cut up to 1,000 jobs worldwide was necessary to “slim down and improve our health.” Lego’s building blocks for decades were among children’s most ardently wished-for toys. Their small size and interlocking design allow them to be put together in cantilevered and curving structures that are impossible to create with conventional blocks. While licensing agreements, a new Lego theme park in Carlsbad, Calif., and a fast-growing multimedia unit are expected to help growth, sales of Lego play materials to shops showed weak improvement last year, the company said.