The toy manufacturer Playmobil is cutting hundreds of jobs after two lean business years. The problems of the manufacturer of the colorful plastic figures run deep.
When the present rattles and rattles, every child knows that someone new is moving into Playmobil City. Maybe pirates, maybe fairies or maybe the garbage disposal? The toy manufacturer Playmobil has been developing and producing popular plastic figures for almost 50 years. They go to school, sit in a café and even go on vacation on a cruise ship. The medium-sized company from near Nuremberg has made a name for itself worldwide, built a strong brand and written an entrepreneurial success story.
But the story now seems to be over; the company has been struggling with growing economic difficulties for several years. The toy industry has actually been experiencing the best times since the corona pandemic. But Playmobil cannot benefit from the boom. The economic difficulties are now having consequences for the employees.
In March, the management of the Franconian toy manufacturer brought in the consulting firm McKinsey, and after a month-long analysis of all business areas, a decision was made: 17 percent of Playmobil’s 4,100-person total workforce should be laid off by 2025, which corresponds to almost 700 jobs worldwide. In Germany, around 370 jobs will be eliminated, or 16 percent of the total German workforce.
“We have to get away from fear”
A spokesman for the company emphasizes that “business developments and current economic challenges” were also taken into account. The company, which, in addition to Playmobil, also owns the plant pot brand Lechuza, continues to feel the effects of the corona pandemic, which has led to losses in sales and profits in the past two financial years.
But the problems at Playmobil are probably deeper. Since the death of Playmobil patriarch Horst Brandstätter in 2015, the company’s management has been accused of not strategically developing the company – and the working atmosphere is considered difficult at best.
On the Kununu review portal, just 20 percent of users would recommend Playmobil as an employer. Comments say that “leaders are ungrateful” and that “bullying is the order of the day.” “Outside great – inside ugh!” writes one user. The works council has also complained in the past about a lack of appreciation and even humiliation of employees – the company contradicts the allegations.
One thing is certain: Patriarch Brandstätter led the company upwards with a strict hand, thrift and an idiosyncratic personnel policy. However, the leadership style obviously created a culture of fear in the company.
“We have to get away from fear,” said Playmobil CEO Steffen Höpfner, who was in office until July, to “Capital” in 2019. After Brandstätter’s death in 2015, he took over his executive chair and wanted to replace the prevailing hierarchy with modern management methods. He formed a strategy team, committed change managers and coaches, and relied on well-sounding values such as team spirit, trust and personal responsibility. But Höpfner remained unlucky. His departure may also have something to do with the fact that, according to observers, the real power in the company still lies with someone else: Brandstätter’s former chief secretary Marianne Albert.
Sales collapse
Today, as chairwoman, she controls the advisory board of the foundation in which the group is organized. “Marianne Albert was always a loyal helper to me,” Brandstätter wrote in his will. “She knows my attitude towards the company.” She was therefore given responsibility for, among other things, human resources management. But the employees grew the impression that Albert had the power of an autocrat, but that she lacked entrepreneurial skills.
Under CEO Höpfner, many ideas were tried out, especially new collaborations, and takeover opportunities were sought. In contrast to Lego, which is also a family business and was still in sight years ago, Playmobil has hardly grown over the last few years, on the contrary: in the 2021/22 financial year, which ended on March 31, sales fell by four percent 758 million euros in the previous year to now around 692 million euros. The operating result even fell by 46 percent to 50.5 million euros. According to internal communications available to “Manager Magazin”, the 2022/23 year was also disappointing.
Even though Playmobil’s return on investment was a very good 20 percent for a long time, the company did not make any progress in terms of profits for a good decade. On the one hand, it was not possible to advance expansion beyond the core markets in Europe; the brand hardly plays a role in the USA or Asia. On the other hand, Playmobil categorically rejected the licensing business for a long time, which helped Lego achieve great success.
Former boss Höpfner changed that, despite resistance. But his projects were not successful. Expensive collaborations with Ferrari or for the 2018 World Cup are said not to have worked, the movie “Playmobil – The Movie”, which was produced with a lot of money, was a flop, and the attempt to create own brands such as Novelmore also failed. A new partnership started in August with Disney’s Mickey Mouse and Winnie the Pooh.
Looking for a new board member
After years in which hardly anything happened strategically at Playmobil, Lego is now out of reach. But Playmobil still has a trump card: comfortable equity capital of hundreds of millions of euros, which Brandstätter once left to his company. The company could definitely afford to make a large purchase with the plastic figures – and, according to experts, it should. In order to have more power over retailers, Playmobil has to grow, even if it is currently still one of the largest European toy manufacturers.
It is obvious that for these approaches to be successful, a reset of the corporate culture is needed. And, most immediately, a successor for the CEO position. CFO René Feser is currently in charge of the operational business, and Playmobil apparently does not want to hire a new boss until further notice. The personnel consultancy Heidrick & Struggles is looking for a new board member.
With the “necessary staff cuts”, the group now also wants to secure jobs in Germany and Europe. An internal communication states that “the necessary measures should be carried out in a socially acceptable and, if possible, amicable manner.” According to “Manager Magazin”, Playmobil also informed the workforce about the outsourcing of mold making. “In the future, molds will be required on a significantly smaller scale, so that an improved cost structure, but also more flexibility in development, will be urgently needed,” it says. A few months earlier, the decoration department had already been outsourced, with around 50 jobs lost.
with research by Lutz Meier