Nike to Cut 2% of Workforce, Impacting Over 1,500 Jobs
Layoffs to Affect Nike Headquarters
Nike CEO John Donahoe has announced that the sportswear giant will be laying off 2% of its workforce, a move that could lead to the elimination of over 1,500 jobs. The decision comes as the company strives to regain lost momentum and cut costs. The layoffs will not affect Nike’s stores, distribution centers, or U.S. manufacturing facilities where the Air insoles are produced. Instead, the impact will be felt at the company’s headquarters near Beaverton, where around 11,400 employees were based last spring on a 400-acre campus.
Layoffs and Future Outlook
The layoffs are set to commence on Friday morning and will continue throughout the following week. Nike’s fiscal quarter ends on February 29, and the company expects further layoffs in the subsequent quarter ending on May 31. CEO John Donahoe expressed the difficulty of these decisions, emphasizing accountability for the current performance of the company. Nike’s ongoing struggles indicate a slower growth rate, with the sales forecast for the fiscal year expecting an increase of only about 1%.
Support for Affected Employees
In his email to employees, John Donahoe assured that Nike will be as supportive as possible. Laid-off employees will receive a comprehensive package including financial, health, and outplacement support. The company recognizes the contribution made by all Nike teammates amid these challenging circumstances.
Realigning for Growth
Nike’s aim to regain growth and momentum has led to a series of restructuring efforts. The company previously announced its plans to cut $2 billion in costs over the next three years, resulting in approximately $450 million in restructuring charges for the current quarter, mainly from severance costs. By streamlining operations, Nike seeks to channel resources into areas with growth potential, such as products for women, the Jordan brand, and running gear.
Market Share Loss and Previous Layoffs
Nike’s recent market position contrasts with the success of smaller, more agile brands like Hoka and On. Market share losses prompted Nike to shuffle its executive team in both May and November, in order to emphasize innovation and breakthrough products. This current round of layoffs follows previous ones, including the layoff of 700 workers in 2020 and the elimination of 745 jobs in 2017.
For inquiries, reach out to Matthew Kish, who covers business, including the sportswear and banking industries, by calling 503-221-4386 or emailing [email protected].
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