The US-based athletic footwear and apparel corporation has announced that it will lay off 2% of its global workforce due to weaker sales and rising competition. The company has not shared details about the exact number of employees to be laid off; however, according to an estimate, Nike has around 83,000 employees worldwide.
The Nike layoffs 2024 will affect nearly 2% of its total workforce. In December, Nike announced it cut nearly $2 billion in costs over three years. The layoffs are expected to start on Friday, and a second phase would be completed by the end of the current quarter.
Nike Announces Layoffs to Save Costs
After posting weaker profits this year, sportswear giant Nike announced it will cut more than 1,600 jobs, amounting to 2 per cent of its total workforce, to save costs. Nike’s global peers Adidas, Puma, and JD Sports have warned of weaker earnings this year as consumers cut back on non-essential spending.
In December, Nike outlined a $2 billion savings plan over the next three years through steps including tightening the supply of some products, improving its supply chain, reducing management layers, and increasing the use of automation.
The company also disclosed that it would incur about $400 million to $450 million in employee severance costs in the third quarter.
Nike CEO Statement on Layoffs 2024
Nike CEO John Donahoe announced that the company is laying off roughly 2% of its workforce Thursday evening. The move was communicated to employees by an internal e-mail that Complex Sneakers obtained.
“While interest in sport, health, wellness and comfort has never been stronger, we are in a highly competitive industry where speed and end-to-end execution is critical to win,” said Donahoe in the e-mail. “To compete, we must edit, shift and divest less critical work to create greater focus and capacity for what matters most.”
Specifically, the e-mail states that the company is focused on accelerating its innovation and investing in its ‘most significant fields of play and growth opportunities’ such as running, women’s, and the Jordan Brand. The job cuts were described as one of the ways Nike is attempting to align its organization with its strategy.
“This is a painful reality and not one that I take lightly,” the e-mail reads. “We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable. That said, I have never been more confident in our leadership and team to drive the clarity and teamwork required to win.”
When asked for comment, a Nike spokesperson issued the following statement to Complex Sneakers,
“Nike’s always at our best when we’re on the offense. 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. While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”
Nike Initiates Workforce Reductions
According to a company filing, Nike had approximately 83,700 employees as of May 31, 2023. The Wall Street Journal, which first reported the news, stated that the cuts were expected to start on Friday, with a second phase to be completed by the end of the current quarter.
The layoffs 2024 are not expected to impact employees in stores and distribution centers or those in its innovation team, the report added.
According to the latest data on layoffs.fyi, 154 companies have laid off 39,496 employees in layoffs 2024. Meanwhile, official data on Wednesday showed Britain’s economy entered a recession in the second half of 2023 after it shrank by a worse-than-expected 0.3 per cent in the three months to December, having also contracted by 0.1 per cent between July and September. The Bank of England has said it expects the economy to pick up in 2024.
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