For employees of Danish toymaker Lego A/S in one European country, Hungary, news of the group's global job cuts plan is likely to have both a sour and a sweet taste.
Lego announced that it intends to cut its overall workforce by 8 percent and has indicated it expects to lay off about 70 workers at its Hungarian plant in Nyíregyháza as part of the cutback.
The global staff reduction will cut 1,400 jobs. Lego currently employs 18,200 people worldwide.
At the same time, Lego remains firmly committed to its operation in Hungary. The group is pressing ahead with a major ongoing expansion program in the country, launched last year.
Investment of more than 100 million euros ($117.5 million) is set to duplicate the size of the Nyíregyháza plant to 290,000 square meters, adding 768 new injection molding machines — double the installed number — and creating up to 1,600 jobs by 2020. The project will see the addition of molding, packing and warehousing space and processing areas, along with new administration buildings.
Last year, Lego began phase one of the expansion plan with the installation of some of the new molding lines at a leased site nearby, as well as putting in extra warehouse capacity and a new Lego Duplo processing plant.
Few details of the planned labor cutback have been revealed to date, but Lego's Hungary management estimated a likely impact of around 70 job losses locally this year. Currently, the national operation employs almost 2,000, mainly blue collar workers.
“As far as the Hungarian factory is concerned, we remain committed to producing Lego products here,” Csaba Tóth, human resources director at Hungary-based Lego Manufacturing Kft. told local media in September.