Mattel Inc. is cutting more than 200 jobs as it merges its Mattel Brands and Fisher-Price divisions into a single unit, but the toy maker's East Aurora operations will escape relatively unscathed, company officials said Thursday.
The consolidation, first announced last October, will result in only a few jobs being lost at Fisher-Price's main office in East Aurora, said Lisa Marie Bongiovanni, a Mattel spokeswoman.
The "overwhelming number" of the job cuts, upwards of 90 percent, will be at Mattel's corporate headquarters in El Segundo, Calif., Bongiovanni said. About 10 percent of the cuts will be spread over the combined divisions' other operations, which includes Fisher-Price's East Aurora office.
"If you tried to count them on your fingers, it wouldn't even add up to all of your fingers," she said, declining to provide an exact number.
Fisher-Price will continue to do its research and design work in East Aurora, Bongiovanni said. "Our infant and preschool business will stay in East Aurora," she said. "What's changing is more the backroom operations and that's something that has more of an impact on the El Segundo operations."
The merger of the two toy divisions into a single unit that goes by the Mattel Brands name brought that business under the direct control of Fisher-Price's former president, Neil Friedman, who last fall assumed a new post as president of Mattel Brands.
The consolidation allows Mattel to be "centralized where it's more efficient to leverage our scale, yet preserves the natural marketing and design groups" for each of the former divisions, said Robert A. Eckert, Mattel's chairman and chief executive officer, during a conference call earlier this week.
Most of the job cuts will be completed by the end of March through a combination of layoffs, attrition, retirements and the elimination of open positions, the company said. In all, Mattel expects to cut its work force by about 1 percent through the consolidation, which is expected to cost between $10 million and $13 million to implement.
Kevin Curran, the former manager of Fisher-Price's New York City office, took over as the top executive at Fisher-Price's offices in East Aurora, with the title of general manager.
Friedman, who was successful in expanding Fisher-Price's sales during his tenure running the East Aurora toy maker, now faces challenges that include reviving Mattel's sagging Barbie business, which has lost ground to competitors like the Bratz multicultural dolls.
Barbie sales in the United States have dropped for three straight years, including 15 percent drops in both 2003 and 2004, followed by a 25 percent plunge last year, PiperJaffray analyst Anthony N. Gikas said in a report this week.
Gikas expects Barbie sales to drop by another 5 percent this year, before Mattel makes major changes to its iconic brand next year.
"The doll business clearly needs work," Eckert said during the conference call, noting that Barbie-related products, such as last fall's "Barbie and the Magic of Pegasus" direct to video movie, have been selling better than the dolls. "The brand is in better shape than the doll business."
Meanwhile, Fisher-Price's fourth-quarter sales improved by 6 percent, led by strong demand for Dora the Explorer products. "Dora the Explorer has been a home run," Eckert said.