Lego Makes Deep Cuts in Move to Mexico
LINDA WERTHEIMER, host:
The company began with carved wooden toys in 1932, and became a worldwide phenomenon with its colorful interlocking blocks. But in recent years, the Denmark-based maker of LEGOs has been struggling, beginning with its first ever loss in 1998. Changing tastes is one reason, says LEGO's CEO Jorgen Vig Knudstorp.
Mr. JORGEN VIG KNUDSTORP (CEO, LEGO Group): What's going on is the traditional toys are disappearing because children have overscheduled lives now, and there's little time for free play. And then, of course, there is the impact of the new media and digital toys, such as games and things you can do with the Internet, and so on.
WERTHEIMER: The company this week announced a major restructuring. It will be shutting 1,200 of its worldwide jobs. In Denmark, 900 employees will lose positions at LEGO's headquarters. Nearly a third of the work will be moved to the Czech Republic, where costs are lower.
Again, LEGO's CEO.
Mr. KNUDSTORP: We would pay between 15 and 25 percent of what we would be paying in Denmark or any other high-cost country like the U.S. or Switzerland. And this is true for both blue collar and white collar employees, so including engine, people like engineers.
WERTHEIMER: LEGO will also close its U.S. factory in Enfield, Connecticut, laying off 300 workers. It was one of the last remaining factories making toys in the United States.
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You're listening to MORNING EDITION from NPR News. I'm Linda Wertheimer.
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And I'm Steve Inskeep.
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