Toy manufacturing company Mattel (NASDAQ: MAT)announced that it will be reducing its workforce by 2,200 employees, representing 22% of its global non-manufacturing workforce. Mattel had announced a cost savings program last year in October, seeking to reduce its costs by USD 650 Million over two years, with one-third of this expected to be achieved this year. In addition to cutting 2,200 jobs, the Company is also selling manufacturing sites in Mexico.
Joseph Euteneuer, CFO of Mattel added: "We are pleased to report that our two-year USD 650 Million Structural Simplification program is on-track. We are ahead of schedule with our SG&A savings actions and, as a result, expect full year adjusted SG&A to be better than the outlook we provided earlier this year. While gross margin was challenged in the first half, we expect a significant sequential improvement in gross margin in the second half of the year."
The Company reported an increased net loss to USD 240.9 Million, or 70 cents per share, from USD 56.1 Million, or 16 cents per share, from last year. Net sales fell 13.7% to USD 840.7 Million in the second quarter ended June 30, missing analyst estimates of USD 851.8 Million. The liquidation of the Company’s biggest customer, Toys “R” Us, reduced the Company’s gross sales by 10%. Total gross sales fell by 11% for the quarter.