Nike to Reduce Workforce by Approximately 2%

Nike announced on Thursday its decision to reduce its workforce by approximately 2%, amounting to over 1,600 jobs, in a bid to streamline operations and cut costs amidst a period of softer profits. This move follows a trend among major sportswear brands like Adidas, Puma (PUMG.DE), and JD Sports (JD.L), who have all projected lower earnings due to a slowdown in consumer spending on non-essential items.

In December, Nike had unveiled a $2 billion cost-saving initiative spanning three years. This plan entails various measures such as optimizing product supply, enhancing supply chain efficiency, streamlining management structures, and increasing automation. Additionally, the company disclosed plans to allocate between $400 million and $450 million towards employee severance expenses in the third quarter.

As of May 31, 2023, Nike’s workforce numbered approximately 83,700 employees, according to company filings. The Wall Street Journal initially reported that the layoffs are set to commence on Friday, with a second phase scheduled for completion by the end of the current quarter. Notably, these workforce reductions are not anticipated to impact employees at retail stores, distribution centers, or those working within the innovation team.