Home » Business News • US Employment News » Nike announces over 1,600 layoffs to cut costs

Nike announces over 1,600 layoffs to cut costs

By Nithya Bose in Business News, posted February 16, 2024

Nike has confirmed it will cut more than 1,600 jobs, as part of its strategy to streamline operations and reduce expenses.

CEO John Donahoe said the firm intends to reallocate resources towards key growth areas such as running, women’s clothing, and the Jordan brand.

The layoffs won't affect retail and distribution center workers and the innovation team.

As of the end of May, the Oregon-based athletic footwear and apparel giant reported employing approximately 83,700 people.

Mr Donahoe said: “This is a painful reality and not one that I take lightly.

“We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.”

The reduction process is set to begin immediately, with a second phase completed by the quarter's end.

This move comes after Nike's December announcement, revising its yearly revenue forecast downwards amid signs of consumer spending caution.

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The company outlined a cost-saving plan targeting up to $2 billion over the next three years, including job cuts and organizational efficiency improvements.

Donahoe's memo highlighted the necessity of focusing on the most critical areas to maintain competitiveness in a challenging market.

This announcement coincided with a reported decline in U.S. retail sales for January, following a strong consumer spending period over the holidays.

Nike faces increased competition from rivals and pressure to innovate while managing inflated inventory levels.

It leads to significant discounts on merchandise that impact profit margins.

The company has also recently made several executive changes in the innovation, design, marketing, and technology sectors to bolster its market position.

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