US Markets
Friday, February 16th, 2024 6:06 pm EDT
Key Points
- Nike is undergoing a restructuring, aiming to optimize its capital investment by cutting 2% of its workforce, equivalent to over 1,500 jobs, with a focus on investing in growth areas such as running, women’s products, and the Jordan brand.
- CEO John Donahoe acknowledges the necessity of the layoffs to reignite growth, emphasizing accountability for the company’s current performance and expressing a commitment to emerging stronger.
- The restructuring plan involves layoffs in two phases, with completion expected by the end of the fiscal fourth quarter, excluding retail and warehouse staff, and aligns with broader industry trends of cautious consumer spending and a demand slowdown for discretionary items.
Nike, headquartered in Beaverton, Oregon, is undergoing a restructuring process, intending to optimize its capital investment in key growth areas like running, women’s products, and the Jordan brand. CEO John Donahoe, acknowledging the necessity of this move, expressed his accountability for the company’s current performance and emphasized the need for revitalization. The restructuring involves cutting 2% of its workforce, totaling over 1,500 jobs, which will be implemented in two phases, with completion expected by the end of the fiscal fourth quarter. While the exact departments affected are unspecified, the layoffs will exclude retail and warehouse staff. This decision aligns with broader industry trends, as consumer spending becomes more cautious, particularly in discretionary categories like apparel and footwear. In December, Nike announced plans to reduce costs by $2 billion over three years, anticipating decreased demand and implementing strategies such as simplifying product offerings, increasing automation, and organizational streamlining. Prior to the official announcement, there were reports of discreet layoffs across various divisions. The restructuring received mixed reactions, with Oppenheimer downgrading Nike’s rating due to concerns about consumer demand and innovation stagnation. However, Donahoe assured affected employees of comprehensive support services, aiming to emerge stronger and continue fulfilling Nike’s mission of serving athletes and fostering the future of sports.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/16/nike-to-lay-off-2percent-of-employees-cutting-more-than-1500-jobs.html
