Danish toy giant Lego is set to axe 1400 jobs as part of a financial overhaul following news its revenues declined for the first time on over 10 years.
After a period of steady double digit growth every year for most of the last decade, Lego revealed a revenue drop of five per cent to £1.8 billion in its first half, while operating profits dropped six per cent to £543.4 million.
The toy brand, which has several retail shops around the world including its largest one in London, has now stated that it would cut around eight per cent of its staff after tripling its workforce since 2004.
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The news comes after recent shock departure of chief executive Bali Padda after just eight months at the helm.
The business grew into a far more complex organisation under Padda, and according to Lego’s executive chairman Jorgen Vig Knudstorp it has “now pressed the reset-button”.
“This means we will build a smaller and less complex organisation than we have today, which will simplify our business model in order to reach more children,” Knudstorp said.
Padda will be succeeded next month by former Danfoss head Niels Christiansen, who will be tasked with returning the company to growth and maintaining its position as the world’s most profitable toy maker.
Revenues reportedly fell in the US and Europe, but saw double digit growth in China despite its new factory in the region experiencing delays.