Nike is the next major US corporation to announce another round of layoffs in the face of a predicted revenue decline.
Nike Layoffs Incoming
US athletic footwear and clothing brand Nike has announced plans to lay off 740 employees currently working at its company headquarters in Beaverton, Oregon.
Confirmed by State Officials
The recent move was announced by the company as well as state and local officials on Friday, which confirmed that all layoffs would be in effect by June 28.
World Headquarters Reduction
“NIKE, Inc. will be permanently reducing its workforce at its World Headquarters located at One Bowerman Dr., Beaverton, OR 97005, and surrounding neighborhoods,” the company notice read.
Part of a “Second Phase of Impacts”
The notice was authorized by the Worker Adjustment and Retraining Notification Act and written by Vice President Michele Adams who wrote that the newest move by Nike was part of a “second phase of impacts.”
Follow Up from February
It will be the second round of layoffs for the company, following confirmation in February that Nike planned to cut 2% of its workforce as part of a 3-year plan to save $2 billion. So far, the company has yet to confirm which positions will be eliminated at the Oregon headquarters.
“At Our Best When On the Offense”
“Nike’s always at our best when we’re on the offense,” Nike shared in a company statement back in February. “The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities as interest in sport, health, and wellness have never been stronger.
2% of the Workforce Affected
“While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates,” the statement concluded.
1600 Employees
With 83,700 employees on the payroll in early 2023, the 2% layoffs would affect more than 1600 employees.
Plans to “Streamline”
Layoffs had been hinted at as early as November, a month before the company first announced the 3-year plan as part of its intention to “streamline” company design and processes.
LinkedIn Layoff Leaks
Several employees took to LinkedIn in November, sharing that they had been unexpectedly laid off by the company as it made major changes to the company C-suite lineup.
Cost-Cutting Strategy for the Future
The three-year plan to streamline the company and save billions is part of a cost-cutting strategy a “low single-digits” drop in company revenue was predicted for the first half of the 2025 fiscal year.
A Timely Decision
The first half of the 2025 fiscal year begins on June 1, so it comes as no surprise that the final cycle of layoffs will be underway by the end of the same month.
Criticisms of Nike Innovation
In the last year industry experts and analysts have levied criticisms at Nike for lacking in design and marketing innovation in its product pipeline.
A “Multiyear Cycle of Innovation”
Nike responded with a “multiyear cycle of innovation” in December, as well as a lineup of new products including the Air Max DN, Pegasus Premium, and more.
Period of Transition for Product Portfolio
The company’s chief financial officer Matt Friend announced that Nike would also be taking its product portfolio “through a period of transition” during the first quarterly earnings call on March 21.
Response to Troubling Prediction
These new changes are a response to troubling revenue predictions as well as harsh domestic and international competition, and collapsing share prices that present a bleak outlook for the iconic athletic wear brand.
13% Share Drop
Nike shares are down by 13% this year, and their net income fell by 5% in the last quarter.
Sales Fall Around the World
Sales numbers have also begun to plummet in the international market, most notably in Europe, Africa, the Middle East, and the Asia Pacific region.
Layoffs Across US Industries
This latest layoff announcement is just the next in a line of staff reductions from notable US companies, including EV giant Tesla and classic clothing and outdoor recreation brand L.L. Bean.
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