Nike is added to the growing list of corporations announcing staff layoffs, CNN reported.
In an email from Nike President and CEO, John Donahoe, the sportswear conglomerate announced on Feb. 16, that 2% of its staff, or 1,700 staff members, will be cut in hopes of escaping $2 billion in costs. As of May 2023, the Portland, Oregon-based company employed over 83,000 people around the world but things started to slow down in December 2023.
Nike began cutting its revenue forecast and shortly after announced cost cuts after concerns
started to grow surrounding consumers slowing down on their spending. To make up for the profit decrease, Nike said they are seeking up to $2 billion in savings over the next three years. “The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities,” the spokesperson said.“While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”
Nike not only faces stiff competition from sneaker brands Hoka and
On Cloud, but also must deal with customers changing their shopping habits. Items like expensive sneakers and athletic wear, once popular throughout numerous demographics, are being traded in for basic needs and life experiences, such as travel.Retailers are also pivoting. Corporations are simplifying the shopping experience by leveraging technology with options like self-checkout and other features to reduce friction in stores. In addition, retailers have integrated digital offerings in their physical stores for a more streamlined shopping experience. Nike started to pay attention to changes like these. Nike’s finance chief Matt Friend said their new approach touches on “indications of more cautious consumer behavior around the world,” including in Europe and China.
According to KGW8, Donahoe said the first round of layoffs will go through the third week of February 2024, followed by the second round by the end of May. With a majority of the layoffs occurring at the Beaverton headquarters, Donahoe said this is a “painful reality” but store employees and distribution center workers will not be affected. “We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable,” he said.
“Nike has a proud history where the most challenging moments bring out the best in us, individually and as a team. I know we will come together to respond once again, and I am confident in our future.”
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