Nike has officially confirmed a 2 percent reduction in its workforce, following months of speculation. This decision aligns with the company’s goal to streamline operations and save up to $2 billion in costs over the next three years, as announced in December.
CEO John Donahoe sent an internal memo to employees, stating, “Nike’s always at our best when we’re on the offense.” The move aims to position the company for growth opportunities amid increasing interest in sport, health and wellness. Nike expressed gratitude for the contributions of all team members affected by the layoffs.
With approximately 83,000 team members globally, Nike employs about 12,000 at its headquarters in Beaverton, Oregon. While specific details are scarce, the company’s focus areas include simplifying product assortment, leveraging technology and driving efficiency.
In December, Nike hinted at the possibility of layoffs, citing potential pre-tax restructuring charges of $400 to $450 million for employee severance, likely impacting fiscal Q3.
Tough competition
Recent developments follow a broader C-suite shakeup in design and marketing, with some employees sharing layoff news on LinkedIn in November. CFO Matthew Friend acknowledged a softer revenue outlook for the second half of the fiscal year.
Despite challenges, Nike’s second-quarter revenues reached $13.39 billion, a 1 percent increase from the prior year, with net income up 19 percent to $1.6 billion. The company aims for a rebound, particularly in running, where it faces competition from brands like Hoka, Brooks and On, all of which have seen success with performance-focused offerings.
