Mattel is moving the manufacturing operations of its Mega Bloks brand from Canada to its facilities in Mexico and China in a move that will see it shrink its Montreal facility.
The toymaker confirmed the move last week, citing that it will enable to company to better use the volume and capacity in the wider supply chain and cut costs. The Mega Bloks operation will begin the migration from September this year.
Mattel intends to maintain the Mega corporate office, as well as design and brand functions in the Canadian city, trimming its workforce to some 230 people. It’s reported that the manufacture move will come with around 580 job losses.
The company bought Mega Brands for $460 million back in 2014 in order to gain a foothold on the construction toys space and compete with the industry leader, LEGO. According to Globe and Mail, four years ago, Mega was toying with an expansion of its Canadian manufacturing operations and move more production from China back to Montreal.
However, the past few years have seen Mattel implement a turnaround plan that includes cost-cutting measures, such as the emigration of manufacture to countries with lower associated costs.