Mattel slashes 2,200 jobs, takes a hit from Toys "R" Us closure

Mattel will be slashing 2,200 jobs, which makes up approximately 22% of its global non-manufacturing workforce. The move comes as the company sees impact from the exit of Toys "R" Us, which has impacted the US toy industry as a whole due to the loss in key customers. This saw gross sales being down 11% as reported and in constant currency, reflecting a 10% impact from the Toys "R" Us liquidation.Marketing has contacted Mattel for details on its marketing team.Earlier this year, Mattel had already cut approximately 100 jobs after shutting its New York office. Back in October, the toy company had in place a cost savings programme aimed at cutting US$65 million in costs over the span of two years. In line with the initiative, Mattel has plans to sell its manufacturing factories in Mexico.According to financial reports published yesterday, Mattel saw a 14% drop to US$82.4 million in its advertising and promotions this year, compared to 2017’s expenses of US$95.5 million, for the three months ending 30 June 2018. For the six months ending 30 June 2018, the company saw a 9% drop in advertising and promotions spend, from US$169.1 million in 2017 to US$153.2 million in 2018.The financial report added that gross sales for its Barbie brand of products was up 12%, while Hot Wheels gross sales up was 21%, despite impact of Toys "R" Us liquidation.Internationally, net sales had decreased by 10%, versus the prior year's second quarter. Gross sales in the International segment decreased by 5%, primarily driven by lower sales of CARS and Fisher-Price and Thomas & Friends. This was also due to impact of the Toys "R" Us liquidation, partially offset by initial sales of Jurassic World and higher sales of Barbie and Hot Wheels. By region, the decrease in gross sales as reported was driven by lower sales in global emerging markets, primarily in China.Ynon Kreiz, chairman and CEO of Mattel said in the report that despite the opportunities in the market, Mattel has been facing a “big discrepancy” between its financial performance over the years and the company’s move forward. He added that while the market is growing, with Toys "R" Us’s liquidation, it will be challenging to hold the stand in the industry. Meanwhile, Mattel added that it is on track to deliver US$650 million savings as a result from progress in its  Structural Simplification program to restore profitability and improve efficiency.Earlier this year, Mattel unveiled three dolls for its new “Inspiring Women” Barbie doll line series containing educational information about the contributions each women made to society and their respective fields. The company also aims to spark global call-to-action by asking fans to tag and share the female role models that inspire them, using #MoreRoleModels on social media.