Mattel, the maker of Barbie and Hot Wheels, said Wednesday it is laying off 2,200 workers — or 22 percent of its corporate workforce — as sales slide following the liquidation of Toys R Us.
“There has been a big discrepancy between our financial performance over the last few years and where the company should be,” chief executive Ynon Kreiz said in a statement.
Shares of Mattel fell as much as 9 percent in after-hours trading following the announcement.
The toymaker offered few details on the timing or locations of the layoffs but said fewer than half would be in the United States. The cuts are part of a two-year, $650 million plan to lower costs, the company said, adding that it also plans to sell two manufacturing facilities in Mexico. Earlier this year, Mattel announced plans to close its New York office, where it had roughly 100 employees.
Toys R Us, which filed for bankruptcy last year, was among Mattel’s largest customers. The two had been doing business together for decades, but that partnership came to an abrupt halt earlier this year when Toys R Us announced plans to liquidate all of its U.S. locations. The retailer had faced intense competition from Amazon, Walmart and Target in recent years and was mired in nearly $8 billion in debt. In court filings, Toys R Us said it owed Mattel $136 million. (Jeffrey P. Bezos, the founder and chief executive of Amazon, also owns The Washington Post.)
Mattel, which brought in $4.9 billion in sales last year, is the world’s second-largest toymaker, behind Lego. The company was founded in 1945 as a home business specializing in picture frames before expanding into dollhouse furniture and child-size ukuleles. Today, the retail behemoth includes dozens of big-name brands, including American Girl, Fisher-Price, Matchbox and Polly Pocket.
Two of the company’s best-known brands — Barbie and Hot Wheels — drummed up more sales in the most recent quarters. Sales of Barbie rose 12 percent from a year earlier, Mattel said, while sales of Hot Wheels grew 21 percent in the period.
Mattel reported a second-quarter loss of $241 million, or 70 cents per share, compared with a loss of $56 million, or 16 cents per share, a year ago.
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