Mattel expands online, cuts 3,000 jobs

Mattel said today that it will spend $50 million to launch an Internet venture that later may be offered to the public.

At the same time, the toy maker said it will let go of more than 3,000 workers as part of a cost-cutting campaign. Mattel also posted a first-quarter loss that matched analysts' estimates.

Mattel becomes the latest corporation to consider jumping on the Net IPO bandwagon. The toy giant was slow to embrace the Net but lately has made up for lost time by acquiring the Learning Company and Purple Moon.

"Upon completion of our merger with the Learning Company, which is expected next month, Mattel will be uniquely positioned to succeed on the Internet," Mattel chief executive Jill Barad said in a statement. "Our vision is to create a premier online destination and e-commerce site to better serve children and their families."

This year, Mattel said it expects to generate more than $60 million in e-commerce revenues, with gross margins that are "greater" than that of its traditional business, Barad added.

Under Barad, Mattel is trying to reshape itself from a traditional toymaker to one that embraces the Net. The transition has been difficult, and competition is intense. Mattel's stock is trading toward the low end of the past 52-week timeframe.