Nike plans to lay off over 1,600 employees: Here's why
Nike, the world's largest supplier of athletic shoes and apparel, is set to eliminate over 1,600 jobs, the Wall Street Journal has reported. This step, taken as part of a cost-cutting initiative, will affect roughly 2% of its total workforce. The company aims to reallocate resources toward key investment areas such as running, women's apparel, and the Jordan brand. Nike's CEO, John Donahoe, outlined these intentions in an employee memo.
Stores and distribution centers not affected
The anticipated layoffs will not affect employees in stores, distribution centers, or those on the innovation team. This move aligns with Nike's strategy to concentrate on strengthening investment in crucial categories. As of November 30, 2023, the company's revenue for the twelve-month period amounted to $51.542 billion. Nike, established in 1964 and based near Beaverton, Oregon, remains a leading US athletic footwear and apparel corporation.
Nike has a rich history and a strong market position
In addition to being the top supplier of athletic shoes and apparel globally, Nike is also a significant producer of sports equipment. The company's cost-cutting measures and strategic emphasis on key investment areas aim to preserve its dominant position in the market.
Nike to incur around $450 million in severance costs
The layoffs at Nike are starting today, and a second phase will be finished by the end of this quarter. The firm will incur expenses of roughly $400-450 million, in worker severance costs. Back in December last year, Nike slashed its yearly revenue forecast, and mapped out a $2 billion cost-saving blueprint. The new layoff announcement seems to be a part of this.
