Saturday, June 15, 2024

Goodbye, Barbie: Mattel to close Mexico plants in cost-cutting measure

California-based toymaker Mattel announced yesterday it will sell off its two manufacturing plants in Mexico after a disappointing sales performance that saw a 14% decline.

The Mattel Mexico plants are located in Escobedo, Nuevo León, and Tijuana, Baja California.

Mattel CEO Ynon Kreiz also announced that the company will lay off more than 2,200 of its global back-office and support employees.

The layoff of 22% of Mattel’s non-manufacturing workforce is intended to preserve the company’s sales-generating and creative capabilities, Kreiz said. The CEO hopes the company can realign resources toward high-performing toys, improving online sales and developing better toy franchises for the future.

Kreiz also stated that Mattel will stop focusing on manufacturing toys and will instead start developing intellectual property.

The layoffs and the sale of the two plants are expected to cut back Mattel’s costs by US $650 million in two years.

The toymaker’s revenue fell 14% during the second quarter to $840.7 million, below the $863.1 million analysts expected.

Mattel said the biggest reason for the decline was the liquidation of Toys R Us.

One company employee in Mexico expressed regret for the decision with a post on Facebook. Mattel “has left us with many memories but above all many friends.”

Source: Reforma (sp), CNN Money (en)

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