Lego Group, whose iconic plastic building blocks have entertained millions of children for more than 70 years, said Tuesday it will shed 1,200 jobs to remold itself in an era when kids prefer playing with electronic gadgets.

The Denmark-based company, which is one of the last to produce toys in the United States, plans to close its U.S. manufacturing plant and lay off 300 people there in early 2007. About 900 employees in Denmark also will be sacked over the next three years.

Poduction will be moved from Enfield, Conn., to Mexico, where costs are lower, the group said in a statement. The company’s distribution facility in Enfield will also be affected, Lego said, without providing details.