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Published July 15, 2026
Mattel cut about 65 more El Segundo jobs in 2026, but Varda Space just leased 205,443 sqft nearby. Aerospace is refilling the base toy jobs left.
Mattel filed a WARN notice in March 2026 to cut about 65 jobs at its El Segundo headquarters, its third layoff round in a year after cutting roughly 89 positions in January. At almost the same time, Varda Space Industries signed a 205,443 square foot lease in a former Mattel building a few blocks away, one signal among several that aerospace hiring in the South Bay is outrunning the toy industry's decline. For owners, the short version is that job losses at one legacy employer are not the same as a weaker rental market when a higher wage industry is expanding into the space it left behind.
Mattel has trimmed its El Segundo headquarters staff across multiple rounds since early 2026: about 89 layoffs in January and roughly 65 more announced in a March WARN filing, effective in May, as the company continues to reallocate spending toward digital games and content and pursue previously announced cost savings targets. Those are real job losses concentrated at 333 Continental Boulevard, and some of those employees are renters in El Segundo, Manhattan Beach, and Hawthorne.
But Mattel's cuts are not the whole employment story in the same zip code. A few blocks from Mattel's headquarters, Varda Space Industries, a company building orbital manufacturing and pharmaceutical facilities, leased 205,443 square feet at 2031 East Mariposa Avenue, a building that once belonged to Mattel's own R&D operations. Varda plans to move in and spend up to eight months building out production space with the goal of assembling additional spacecraft, which means additional hiring in engineering, manufacturing, and operations roles.
El Segundo and the surrounding South Bay have quietly become one of the densest aerospace and space corridors in the country, anchored by SpaceX, Northrop Grumman, Boeing's satellite operations, and a growing bench of newer companies like Varda. According to the Los Angeles County Economic Development Corporation, the county's aerospace and defense sector added roughly 11,000 jobs between 2022 and 2024, at an average wage of about $141,110, more than double the countywide average wage. That is a structurally different tenant profile than toy company back office staff: higher income, often relocating from out of state, and frequently willing to pay a premium to live close to the job.
This matters directly for rental demand because it changes who is competing for the same units. A software engineer or aerospace technician earning well above the county median can outbid a marginal applicant for a two bedroom in El Segundo or Manhattan Beach, and does not need the unit to be cheap, just close to the commute.
Industrial and R&D space in the South Bay is historically tight, which is one reason companies like Varda are absorbing former Mattel buildings rather than building new ones. Colliers reported South Bay industrial vacancy fell to about 5.0% in the first quarter of 2026, down year over year, with the strongest quarterly leasing volume in the submarket's history. Tight commercial space near job centers tends to pull rental demand toward nearby housing stock, because workers want to live within a short drive of campuses that are hard to relocate.
None of this means Mattel's layoffs are irrelevant. A company cutting headquarters staff in three separate rounds inside a year is a real signal of decline in one specific employer, and a few dozen households losing income in a single zip code can show up as slower lease-ups or softer asking rents for a quarter or two, especially at the lower end of the market. The honest read is that El Segundo's rental base is bifurcating: pressure at the legacy corporate-employee end, and firming demand at the aerospace and space-tech end.
If you own rental property in El Segundo, Manhattan Beach, Hawthorne, or nearby South Bay cities, do not price purely off headline layoff news from one employer. Look at who is actually filling your applications: if you are seeing aerospace, defense, or space-tech employers on pay stubs, that is a durable, higher-income demand source that has been expanding for several years, not a one-quarter blip. If your unit sits closer to Mattel's remaining workforce and further from the aerospace corridor, budget for slightly more marketing time and stay flexible on lease-up pricing rather than assuming rents will keep climbing on autopilot.
If you would rather have someone who actually reads the local employment filings track this for you instead of guessing from headlines, that is part of what we do at Schofield.
This is general information, not legal or tax advice. Confirm with a licensed professional before you act.
Last verified: July 2026.
Topics: market, el-segundo, aerospace, employment, rental-demand
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Schofield Properties is a family run property management company at 323 Richmond St, El Segundo, CA 90245. We have managed the South Bay since 1972 and personally oversee about 186 doors today. Book a call to talk about your property.
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