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Toy giant Lego to cut 380 jobs at key Danish site

By: By Richard Higgs
EUROPEAN PLASTICS NEWS

February 15, 2013

BILLUND, DENMARK -- Global toy maker Lego A/S has announced plans to cut 380 jobs by summer 2015 at its main production site in Billund, when it shuts down the plant's product decoration and packaging units.

The labor cuts, taking effect over the coming months, will start with 75 posts being declared redundant this year. A further 200 jobs will disappear during 2014, the company said.

Processing and packaging will be concentrated at other Lego group manufacturing sites in Hungary, the Czech Republic and Mexico. The move is part of the company's strategy to locate product packaging close to its core markets to reduce delivery times, Billund-based Lego explained.

Lego strongly denied the cutback is a signal it plans to halt toy production altogether at its key Danish site. In fact, the plant remains the group's centre for molding its world famous colored Lego bricks.

"On the contrary: We regard Billund as a skills center in the field of molding technology. Over the next few years we will be making a triple-digit million kroner investment in our injection molding facility in Billund," declared Lego group CEO Jørgen Vig Knudstorp. Billund is one of Europe's biggest plastics injection molding plants, he pointed out.

Worker representatives greeted news of the Danish job cuts with dismay.

"My colleagues have always pulled their weight and fought to keep jobs in Denmark. Many of them have worked for the company for years and their families worked in the area for several generations," commented Billund shop stewards' convenor Berit Flindt Pedersen.

Lego promised to do all it can to help its "highly skilled and dedicated workforce" to find alternative jobs, either within the group or with other companies.

The group is currently constructing a new 80,000-square-meter, 125 million euro ($167 million) factory complex at Nyíregyháza in northeast Hungary which is due for completion next year. Work on a new product packing unit there is due to start this year, followed by the construction of a new plastics molding plant equipped with 450 injection machines. The complex will replace Lego's leased plant nearby in 2015.

Lego is also expanding its manufacturing site at Kladno in the Czech Republic.