Mattel is closing its only remaining U.S. toy factory and laying off 250 employees who work at the plant in Paramount as part of an effort to reduce costs, the company confirmed Friday.
The Hawthorne-based toy company expects to save $4 million to $5 million a year by transfering its U.S. manufacturing operation to Mexico, where labor costs are lower. The factory made plastic toy parts that were then shipped to Mexico for assembly.
Employees learned of the layoffs Tuesday, and about 100 workers already have been let go. "We're very unhappy and upset about it," said Amy Ann Stratton, secretary of United Rubber Workers local 938, which represented the Mattel employees. "But the handwriting was on the wall."
Mattel has been trimming its operating expenses--among the highest in the toy industry--partly to compensate for the sharp $250-million decline in sales last year of its Masters of the Universe collection of boys action figures and its Rainbow Brite dolls. This year, the company is counting on its Captain Power "laser" toy, although most analysts don't expect Captain Power to fully compensate for last year's sale drop.