Danish toy maker Lego will cut 1,400 jobs, or about 8% of its global workforce, after reporting a decline in sales and profits in the first half of 2017. The privately held company said Tuesday that its revenue dropped 5% to $2.4 billion in the first six months of the year, mainly as a result of weakness in established markets like the US and Europe. Profits slipped 3% to $544 million. "We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this," said Chairman Joergen Vig Knudstorp, per the AP. He said the long-term aim is to reach "more children in our well-established markets in Europe and the United States," and added there were "strong growth opportunities in growing markets such as China."
The company, he said, needs to simplify its business model to reduce costs, though details weren't immediately available on what that might mean. Since 2012, the group has built an increasingly complex organization to support global double-digit growth. However, "in the process, we have added complexity into the organization which now in turn makes it harder for us to grow further," Vig Knudstorp said. The company has been lauded for embracing the digital era through smartphone apps and tie-ins with movies and video games, notes Reuters. The maker of the famous colored building blocks has more than 19,000 employees around the world. (Read more Lego stories.)