Dive Brief:
- Mattel is considering AI applications across the business as it pursues a three-year, $200 million cost-savings target by 2026, the toy maker said in its Q1 2024 earnings call.
- “We are looking at AI broadly in terms of integrating more capabilities into different types of analytics, as well as product development and also product integration,” Mattel CEO Ynon Kreiz said during the call.
- Kreiz said Mattel’s AI exploration plans support other business goals in addition to the cost-saving initiative. The toy company built a dedicated team to lead the efforts.
Dive Insight:
Mattel is on the heels of surpassing a previous cost-savings target, and the toy maker is looking to AI to keep the momentum going.
“We continued to improve operations and achieved $132 million of cost savings in 2023,” Kreiz said during the company's Q4 2023 earnings call in February. Mattel reached total annualized savings of $343 million between 2021 and 2023, nearly $100 million above its initial target of $250 million.
The company's current cost-cutting target seeks to unlock additional efficiencies and cost-saving opportunities, Kreiz said.
AI has become a part of the cost-saving agenda at many organizations, even as the technology itself requires millions to develop. More than half of C-suite leaders anticipate AI will save them money this year, according to a Boston Consulting Group survey in January.
But organizations are also struggling to establish generative AI’s ROI and determine its implications on tech talent needs.
Shopify has looked at how AI can impact headcount moving forward. The company has an eye out for positions or departments within Shopify that could benefit from AI-powered tools and workflows.
“Now, we can use AI to not only be thoughtful about headcount but also then add to that the capabilities of being proactive,” Shopify CFO Jeff Hoffmeister said during a conference in March. “That’s the reason why — one of the key reasons why — I get as confident as I am in terms of where we are from a headcount perspective and, obviously, its implications on margins.”
But Shopify is still in the early days of its AI journey.
“When it comes to AI at Shopify, we’re still getting dressed at the hotel,” Shopify President Harley Finkelstein said at a conference in March, according to a Seeking Alpha transcript. “We haven’t gotten to the stadium yet.”
