The Nike layoffs announcements from back in February will soon finish taking shape in June, as 740 employees from their World Headquarters in Oregon will be asked to leave. The company had announced a 2 percent reduction of the workforce, targeting a reduction of at least 1,600 employees over time. Nike’s layoffs within its workforce are part of a much larger cost-cutting strategy after their last annual report in December did not see profitable results to the degree the company had expected. The news of Nike’s layoffs have not been sudden as the company has spent 2024 gradually easing employees into gearing up for job cuts with the intention of “right-sizing” the business efficiently.
As per USA TODAY, the company’s shares rose by almost 2 percent last week, but in comparison to the last 12 months, they have fallen by more than 23 percent. The company is expecting the revenue to decline in the first half of its 2025 fiscal year which should begin on June 1, so the Nike layoffs news appears to be the company’s attempt at navigating the fall.
Image: Nike
Nike Layoffs Announcement Highlight the Company’s Cost-Cutting Strategy
Hints of Nike’s layoffs strategy first came to light in December, when the company reported its plans to cut approximately $2 billion USD in their costs over the upcoming three years. It was clear that this would inevitably include job cuts to reduce the workforce and this opinion was validated when the company later announced its plans to lay off 2 percent of its workforce in February. Alongside this, the company reported that it would incur $400 million USD to $450 million USD in restructuring costs from the severance charges that would arise from the layoffs.
Now, according to the Worker Adjustment and Retraining Notification filed last week, the company stated that it is set to begin its workforce reduction process. The Nike layoffs announcement states that by June 28, around 740 employees from the Oregon headquarters are going to be displaced from the company. Reportedly, the exact job titles and the employee numbers will be announced later once determined. This doesn’t give us enough insight into the departments that are set to be affected but it may not be as heavy on those in technology-oriented fields considering the industry, such as the recent layoffs at Google. Additionally, bumping rights are not available to the workforce affected by the Nike layoffs. This means that employees who are asked to leave cannot opt to take on a less senior role at the organization as a solution to their job cuts. Those who are notified about the job cuts must depart from the organization.
Streamlining the organization should allow the company to redirect resources while taking a closer look at the job roles and titles that have been devised over the last few years. According to Business Today, the company had around 83,700 employees as of May 31, 2023, which is no small number when it comes to managing the workforce. It is possible that there are redundant jobs that the Nike workforce layoffs will address, even as the employees affected are left bereft in a job market with unstable prospects.
Nike Layoff News Is Only Part of the Change Taking Place Around the Company
The Nike layoffs announcement is only part of the overall revenue generation strategy. The company has a target of returning to its wholesale plans and has already revisited partnerships that it had previously turned away from. According to Retail Dive, the company has returned to conversations with outlets like Macy’s, Foot Locker, and DSW to help make progress with innovation. The company made multiple changes to its leadership recently, with a new CTO, Amazon’s Dr Muge Erdirik Dogan, and a new CMO, Nicole Hubbard Graham, who was a returning employee. The company’s Chief Design Officer, Chief Innovation Officer, Chief DEI Officer, and head of the women’s business were also changed according to the report.
“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, according to USA TODAY
With new leaders ready to lead the teams, the company hopes to start performing to its full potential and upgrade its sales strategy to meet targets more easily. There have been no public reports of how the company aims to manage the outgoing employees and what benefits will be offered to them. While the company has reported its severance expenses, just how much each employee will be provided with remains unclear. Considering the substantial budget that has been allotted for this purpose, the hope is that employees affected by the Nike layoffs strategy are provided with sufficient benefits to see them through to the next step in their careers.