Toy maker Mattel to cut 1,000 jobs worldwide

NEW YORK - Mattel Inc. said Thursday it is cutting about 1,000 positions worldwide because of the economic downturn that is clouding the holiday outlook for toy makers.

Mattel, which makes Barbie, American Girl and Fisher Price products, among others, said the positions amount to 3 percent of its worldwide work force and will reduce its professional and management staff by 8 percent.

The company said the cuts will come from a combination of layoffs, attrition and retirements and will not affect holiday toy production.

Mattel did not break down the numbers by region but said about 170 positions were cut at its El Segundo, Calif. headquarters. Some 70 job cuts are at the company's Fisher Price unit, which has a total staff of 900.

"We had our best year last year. ... However, we're not immune to the unbelievable, unprecedented rise in the cost of manufacturing, the recessionary trends and the slowing economy," Fisher Price spokeswoman Brenda Andolina said from the unit's headquarters in the Buffalo, N.Y., suburb of East Aurora.

There were also an undisclosed number of job cuts at Mattel's American Girl division, as well as international sales and marketing offices globally.

The company said the move was part of an attempt to analyze its cost structure and make changes to boost productivity. The economic slowdown "amplified" the need to address Mattel's structure and streamline its global work force, spokeswoman Lisa Marie Bongiovanni said in a statement.

Toy makers have been battling high costs for commodities such as resin and have had to pass some of the costs on to consumers via higher selling prices.

Last month, Mattel reported fiscal third-quarter profit edged up less than 1 percent to $238.1 million, falling short of analyst expectations. Sales rose 6 percent to $1.95 billion.

Expenses for advertising, promotions and other selling and administrative expenses all rose during the quarter.

No other major toy companies have announced job cuts recently, but all are facing a difficult environment because of commodity costs and consumers who are reluctant to spend money.

When Pawtucket, R.I.-based Hasbro Inc., the maker of the Trivial Pursuit and Clue board games, reported earnings last month, Chief Financial Officer David Hargreaves said the company was "adjusting our expectations and spending plans accordingly" given the "severity of what is now happening in the global economies."

Major retailers reported October sales Thursday that were the weakest since at least 1969, as the financial crisis and mounting layoffs left shoppers too scared to shop. The news further darkened the outlook for the holiday sales season.

Needham & Co. analyst Sean McGowan said Thursday that Mattel's move is not that surprising considering toy makers have been facing higher costs for about two years.

"I don't think its a sign that things are suddenly worse," he said. "Companies have to do things like this. I'm not reading much into it."

Mattel shares closed down 46 cents, or 3.1 percent, to $14.52, amid a broader market tumble.

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Associated Press Writer Jacob Adelman in Los Angeles and Carolyn Thompson in Buffalo, N.Y., contributed to this report.

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