Mattel to Layoff 20% of its Workforce

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Mattel Logo
Mattel Logo

It looks like the closing of Toys R’ Us is starting to have an affect on toy manufacturers. Yesterday’s earnings call revealed that Mattel has posted a 14% drop in sales for the Second Quarter of 2018. This significant drop forces the company to further decrease its workforce by 22%, which is 2,200 employees. According to Mattel CEO Ynon Kreiz, the vast majority of these jobs would be back-office and support roles, and includes closing all of its factories in Mexico.

Between April and June, sales fell a sharp 11%. Revenue would have been close to flat, though still down, if Toys “R” Us hadn’t gone bankrupt, Kreiz said. The bright spots for the company include Barbie sales growing 12%, and Hot Wheels sales being up 21%. Enchantimals and “Jurassic World” toys also sold well, but that’s about it. Normally great movers like “Cars” movie themed toys, Fisher-Price, Thomas & Friends and Toy Box toys were particularly heinous last quarter. American Girl doll sales tumbled 32%. “Monster High” and “Mega” toys were also fairly bad.

Another particularly disturbing issue was that as commodities and oil soared in value, Mattel experienced higher materials costs. Sales in China also fell as their economy slowed. The resulted in Mattel’s profit margin falling sharply from 41% to 30%. This trend is surely not just affecting Mattel, as other toy manufacturers are surely feeling the brunt of material costs rising.

So what are your thoughts on this one? How does this affect the future of DC Multiverse, a collector-oriented line of toys? Let us know in the comment section below!

About Mattel:

Mattel, the largest toy company in the world, was founded in 1945. It produces a huge range of dolls, toys, games, and video games for boys and girls of all ages. In addition to the company’s very-well-known lines like Barbie and Hot Wheels, Mattel also provides merchandise under license to some of the world’s most famous properties. Many of the firm’s products have become a part of our culture and one would be hard pressed to find any adult in this country who has not owned, played with, or at least touched one of Mattel’s myriad of toys.

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