Key Points:
- Nike plans to reduce its workforce by 2%, resulting in over 1,500 job cuts.
- The decision is part of a broader restructuring effort to reallocate capital to growth areas like running, women’s, and the Jordan brand.
- Layoffs will occur in two phases, with specific timelines varying by region.
- Nike pledges comprehensive support services for affected employees and expresses confidence in its ability to rebound stronger.
Nike revealed late Thursday that it plans to reduce its current workforce by 2%, resulting in more than 1,500 job cuts, as part of a broader restructuring effort to reallocate capital to invest in growth areas. The Beaverton, Oregon-based sneaker giant intends to enhance its presence in running, women’s, and the Jordan brand segments to reignite growth.
John Donahoe, CEO of Nike, Inc., said, “This is how we will reignite our growth.” Donahoe described the decision as a “painful reality” but underscored accountability, stating, “We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.”
Nike outlined that the layoffs will occur in two phases, with the first round commencing immediately and the second phase expected to conclude by the end of its fiscal fourth quarter in May. However, cuts in the EMEA region will follow a different timeline due to local labor laws.
The company clarified that the layoffs will not affect retail employees or warehouse workers at Nike’s stores. While specific departments impacted by the layoffs were not disclosed, Nike emphasized its commitment to preserving jobs in customer-facing and operational roles.
The decision comes amid cautious consumer spending trends and an anticipated slowdown in demand for discretionary items like apparel and footwear. In December, Nike unveiled a restructuring plan to reduce costs by approximately $2 billion over the next three years, aligning with expectations of softer sales and lower demand. Nike’s restructuring plan includes simplifying its product assortment, increasing automation and technology utilization, streamlining organizational structures, and leveraging scale for efficiency gains.
Reports from The Oregonian suggest that Nike had quietly implemented layoffs in various divisions before the official announcement. The company’s restructuring efforts have affected several departments, including recruitment, sourcing, brand, engineering, human resources, and innovation.
Donahoe assured affected employees of comprehensive support services, including financial assistance, healthcare benefits, and outplacement support. Despite the challenges, he expressed confidence in Nike’s ability to emerge stronger and continue serving athletes worldwide.
