Jump to content

  • Log in with Facebook Log in with Twitter Log In with Google      Sign In   
  • Create Account

Welcome to BZPower!

Hi there, while we hope you enjoy browsing through the site, there's a lot more you can do if you register. Some perks of joining include:
  • Create your own topics, participate in existing discussions, and vote in polls
  • Show off your creations, stories, art, music, and movies
  • Enter contests to win free LEGO sets and other prizes
  • Participate in raffles to win LEGO prizes
  • Organize with other members to attend or send your MOCs to LEGO fan events all over the world
  • Much, much more!
Enjoy your visit!

Photo

Disappointing First Half Profits Results in LEGO Lay Offs


  • Please log in to reply
13 replies to this topic

#1 Offline Hapori Tohu

Hapori Tohu
  • None
  • Heart of BZPower

  • 16-July 01
  • 3,606 posts
  •  

Posted Sep 05 2017 - 07:17 AM

Earlier today LEGO shared that both their revenue and profits for the first half of 2017 had decreased compared to 2016. This is a striking result considering they have been reporting nothing but growth for the past several years. LEGO Group Chairman Jorgen Vig Knudstorp has stated that the company is planning to make changes to streamline and simplify its operations in an attempt to turn things around by the end of the year. Unfortunately, part of the plan will be to lay off 1,400 employees of the current 18,200 that work for LEGO. We wish them all the best of luck and hope they are able to land on their feet.

View the full article

  • 0

#2 Offline VahiHolder02

VahiHolder02
  • Members
  • Tohunga

  • 30-January 16
  • 45 posts
  •  

Posted Sep 05 2017 - 08:53 AM

I'm curious to see if in the next couple of years, LEGO will release fewer themes. I think there may be some degree of cannibalistic erosion in sales, due to too many themes competing against each other. 


  • 0

#3 Offline _Kocytean_

_Kocytean_
  • Members
  • Turaga

  • 26-March 14
  • 90 posts
  •  

Posted Sep 05 2017 - 09:06 AM

Yet their cashflow increased massively. It looks like they killed their profit margin. That's a serious problem.


  • 0

#4 Offline Toa Smoke Monster

Toa Smoke Monster
  • Premier Member
  • Premier Outstanding BZP Citizens
  • Snagging Prowler

  • 09-April 10
  • 11,388 posts
  •   Outstanding BZPower Citizen

Posted Sep 05 2017 - 08:05 PM

I knew that a time would come when Lego would start having a decline in sales. Its bound to happen when your profits keep going up year after year. Eventually, you hit a high point and start to go down after that. 

 

Regardless, it's a shame all those employees are losing their jobs. 


  • 0

Everyone is one choice away from being the bad guy in another person's story.

 

fjEpIZR.png


#5 Offline VBBN

VBBN
  • Members
  • Emerging Ice Warrior

  • 29-January 06
  • 1,891 posts
  •  

Posted Sep 06 2017 - 08:01 AM

Interesting to see Lego's employee totals over the past few years- essentially, but laying off 1400 people, they are backing themselves up one year.

 

2017: 18,200 est, 16,800 after layoffs

2016: 16,836

2015: 13,974

2014: 12,582

2013: 11,755

2012: 10,400

 

To me it seems like a short term solution to make their numbers look pretty for the end of the year, but I assume there are more underlying problems here, given that the cash flow from operating activities has increased yet net profits are going down. I mean it's not at all uncommon for a company to have maybe a 3-5% drop after continuous years of sale. I do think it's a mistake to cut the workforce as such before they even hit the holiday season. From what I've learned in researching companies, the more effective strategy is never to offload a mass amount of workers, but rather to keep a more stringent eye on how many you load in the future. So, in this case, instead of dropping 1400 people, the key here may be to not continue with the 1000-1300 person jump each year, and instead try to focus on utilizing that same 18200 person figure for 2018 and beyond more effectively. Obviously i don't know the specifics of the situation here and I'm sure Lego has people who already thought of such a solution, but just my own thoughts here. 


Edited by VBBN, Sep 06 2017 - 08:13 AM.

  • 3

#6 Offline Pohaturon

Pohaturon
  • Premier Member
  • Premier Members
  • Conqueror of the Swarm!

  • 11-March 07
  • 742 posts
  •  

Posted Sep 06 2017 - 09:56 AM

See, this is what happens when you cancel Bionicle. 

 

:kakama:


  • 7

Stone does not bend. Stone does not break. Stone endures. :kakama: 

 

You can read my BZP epic, Unification, here.

 

I write stories, which you can read at A Beach, Somewhere


#7 Offline necross hordika

necross hordika
  • Members
  • Pahrak-Kal Melted

  • 09-December 02
  • 4,584 posts
  •  

Posted Sep 06 2017 - 10:35 AM

See, this is what happens when you cancel Bionicle. 

 

:kakama:

That was rude. :gavel:

One cancellation is not the cause for such a big layoff. Maybe the story team and company workers had been bloated with people for too long to be cost effective.
It was just unfortunate that 2016 just sold poorly because of many factors and rushed story with lack of depth. Maybe a too big team meant too many ideas were going on to make a proper story but we will never know.

But the other themes (except Ninjago and Star Wars) could selling poorly as well, not everyone buys expensive big sets.


Edited by necross hordika, Sep 06 2017 - 10:40 AM.

  • 0


#8 Offline Aanchir

Aanchir
  • Premier Member
  • Premier Reporters
  • Another Chir Brother

  • 04-September 06
  • 6,587 posts
  •   BZP Reporter

Posted Sep 06 2017 - 10:53 AM

 

See, this is what happens when you cancel Bionicle. 

 

:kakama:

That was rude. :gavel:

One cancellation is not necessarily the cause for layoffs. Maybe the story team and comapny workers has been bloated with people for too long to be cost effective.

It was just unfortunate that 2016 just sold poorly because of lack many factors and lack of depth. Maybe a too big team meant too many ideas were going on but we will never know.
But the other themes could selling poorly as well.

 

For what it's worth, this isn't a matter of things "selling poorly". LEGO is still bringing in more money than they were at this point in 2015 and generating more profit than at this point in 2014 — their profits and revenues are simply no longer on a growth trajectory.

 

And yeah, as fun as it might be to be snarky and blame this on Bionicle ending, let's not forget that LEGO had no trouble thriving for years after they cancelled Bionicle the first time! ;)

The main reason for the layoffs, as VBBN points out, seems to be that LEGO had been on something of a hiring binge lately, probably with the expectation that future growth would be enough to cover the costs. Between first half 2015 and first half 2016, LEGO took on 3500 workers, growing their workforce by 24%. A decline in revenues and profits is enough to tell LEGO that they may have jumped the gun there and need to scale things back a bit. It would probably have been more responsible not to take on so many new hires in the first place, but as the cliche goes, hindsight is 20/20.


  • 4

#9 Offline Pohaturon

Pohaturon
  • Premier Member
  • Premier Members
  • Conqueror of the Swarm!

  • 11-March 07
  • 742 posts
  •  

Posted Sep 06 2017 - 09:37 PM

 

See, this is what happens when you cancel Bionicle. 

 

:kakama:

That was rude. :gavel:

One cancellation is not the cause for such a big layoff. Maybe the story team and company workers had been bloated with people for too long to be cost effective.
It was just unfortunate that 2016 just sold poorly because of many factors and rushed story with lack of depth. Maybe a too big team meant too many ideas were going on to make a proper story but we will never know.

But the other themes (except Ninjago and Star Wars) could selling poorly as well, not everyone buys expensive big sets.

 

You don't genuinely believe I was serious about that quip, do you?  :P

 

:kakama:


  • 3

Stone does not bend. Stone does not break. Stone endures. :kakama: 

 

You can read my BZP epic, Unification, here.

 

I write stories, which you can read at A Beach, Somewhere


#10 Offline Lyichir

Lyichir
  • Premier Member
    BioniLUG Member
  • Premier Members
  • A Chir Brother

  • 21-March 06
  • 4,472 posts
  •  

Posted Sep 07 2017 - 08:27 AM

See, this is what happens when you cancel Bionicle ANGRY BIRDS

 

:kakama:

Because last time they cancelled Bionicle things worked out A-OK for them. Clearly only one theme's cancellation could be to blame. :P


Edited by Lyichir, Sep 07 2017 - 08:28 AM.

  • 2
Formerly Lyichir: Rachira of Influence
Aanchir's and Meiko's brother

#11 Offline Pohaturon

Pohaturon
  • Premier Member
  • Premier Members
  • Conqueror of the Swarm!

  • 11-March 07
  • 742 posts
  •  

Posted Sep 07 2017 - 09:11 AM

 

See, this is what happens when you cancel Bionicle ANGRY BIRDS

 

:kakama:

Because last time they cancelled Bionicle things worked out A-OK for them. Clearly only one theme's cancellation could be to blame. :P

 

Nah, this is delayed economics at work. If they hadn't axed Galidor all those years ago, everything would be fine and dandy.

 

:kakama:


  • 2

Stone does not bend. Stone does not break. Stone endures. :kakama: 

 

You can read my BZP epic, Unification, here.

 

I write stories, which you can read at A Beach, Somewhere


#12 Online xccj

xccj
  • Premier Member
    BioniLUG Member
  • Premier Reporters
  • Senior Staff Mask Maker

  • 17-January 03
  • 7,100 posts
  •   BZP Reporter

Posted Sep 07 2017 - 03:35 PM

It's a bit disappointing that the first time they see a slump in profit they decide to cut jobs. I'm sure there's all sorts of business sense for it and everything, but still is sad when you hear lots of folks will get let go. :(

It'll be interesting to see what the company changes. It's not like they're quite as erratic as they were in the 90s, but I'm sure there's still some things that could (and probably will) change.

:music:

  • 2

#13 Offline Major America

Major America
  • Members
  • Seeker

  • 02-August 14
  • 260 posts
  •  

Posted Sep 12 2017 - 10:13 PM

It's a bit disappointing that the first time they see a slump in profit they decide to cut jobs. I'm sure there's all sorts of business sense for it and everything, but still is sad when you hear lots of folks will get let go. :(

It'll be interesting to see what the company changes. It's not like they're quite as erratic as they were in the 90s, but I'm sure there's still some things that could (and probably will) change.

:music:

 

Maybe if things get as bad as they did back in the 90s, LEGO will bring Bionicle back for a G3 and put in as much effort - if not more - as they did for G1. It's amazing what people/companies/nations/bands/etc can accomplish when there is pressure to get something done and though failure isn't an option, there's a high risk of it. 


  • 0

#14 Offline Lyichir

Lyichir
  • Premier Member
    BioniLUG Member
  • Premier Members
  • A Chir Brother

  • 21-March 06
  • 4,472 posts
  •  

Posted Sep 13 2017 - 08:14 AM

 

It's a bit disappointing that the first time they see a slump in profit they decide to cut jobs. I'm sure there's all sorts of business sense for it and everything, but still is sad when you hear lots of folks will get let go. :(

It'll be interesting to see what the company changes. It's not like they're quite as erratic as they were in the 90s, but I'm sure there's still some things that could (and probably will) change.

:music:

 

Maybe if things get as bad as they did back in the 90s, LEGO will bring Bionicle back for a G3 and put in as much effort - if not more - as they did for G1. It's amazing what people/companies/nations/bands/etc can accomplish when there is pressure to get something done and though failure isn't an option, there's a high risk of it. 

 

Maybe that's not something to hope for? Bionicle is not more important than all of Lego's other themes. Besides, if that were to happen Lego would more likely look to one of its more recent, reliable hits like Ninjago or City than to a theme they already tried and failed to make appealing for modern audiences.


  • 1
Formerly Lyichir: Rachira of Influence
Aanchir's and Meiko's brother




0 user(s) are browsing this forum

0 members, 0 guests, 0 anonymous users