Lego cuts 380 jobs in Denmark, moves packaging abroad

COPENHAGEN (AFP) - Lego, the Danish maker of colourful toy bricks, said on Tuesday it would cut 380 jobs at its main plant in Denmark by 2015 as it moves its packaging activities abroad to slash costs.

"For some employees it will be natural departures. Other employees will be able to acquire new skills and find other positions within the Lego group. But unfortunately, we will not be able to avoid some lay-offs," chief executive Joergen Vig Knudstorp said in a statement.

The unit affected by the job cuts, at Lego's headquarters in Billund, makes both the toys' packaging and decorations. The cuts will take place over several years, starting with 75 in 2013 and 200 in 2014.

Lego hopes to reduce delivery times by packaging the toys closer to the markets where they will be sold.

More than 90 per cent of the production in Billund is already packaged abroad, the group said.

The company stressed however that it plans to continue to invest in Denmark.

"In our opinion, Billund is a centre for excellence in the field of casting technology, in which we are going to invest hundreds of millions in the years to come," Knudstorp said.

Founded in 1934, Lego is a family-owned group. In 2010, it became the world's fourth largest player in a traditional toy market dominated by Mattel of the United States.

Lego experienced a severe crisis in the late 1990s and early 2000s as fierce competition from interactive electronic and computer games brought the Danish company to its knees for the first time in its history.

The company underwent a harsh restructuring, including massive lay-offs, the closure of production sites and a sharp refocusing on the core-business of building blocks.