In a bid to streamline operations and reduce costs, Nike plans to reduce its workforce by approximately 2 per cent, equating to over 1,600 jobs. This move mirrors similar actions undertaken by its industry counterparts such as Adidas, Puma, and JD Sports, who have also signaled weaker earnings due to decreased consumer spending on non-essential items.
In December, Nike unveiled a $2 billion cost-saving initiative spanning three years, which includes measures like optimising product supply, enhancing the supply chain, streamlining management structures, and leveraging automation. The company disclosed plans to allocate between $400 million and $450 million for employee severance expenses in the third quarter.
As of May 31, 2023, Nike boasted approximately 83,700 employees, according to regulatory filings. The Wall Street Journal initially reported that layoffs would commence soon, with a second phase slated for completion by the end of the current quarter. Notably, the layoffs are anticipated to spare employees in retail stores, distribution centers, and those within the innovation division.
