Job cuts were expected to start on the apparel and shoe brand Nike on Friday, following a Thursday announcement and circulated memo. The Nike layoffs will reportedly hit 2% of its total workforce, impacting greater than 1,500 employees.
“It is a painful reality and never one which I take evenly,” Nike CEO John Donahoe said within the memo. “We usually are not currently acting at our greatest, and I ultimately hold myself and my leadership team accountable.”
Nike ranks No. 9 within the Top 1000, Digital Commerce 360’s database of the most important North American e-retailers by online sales.
Why Nike layoffs are happening
Nike’s layoffs come as a part of an ongoing restructuring effort announced in December 2023. In that plan, the corporate outlined its intent to chop $2 billion in costs over three years.
“While interest in sport, health, wellness and luxury has never been stronger, we’re in a highly competitive industry where speed and end-to-end execution is critical to win,” Donahoe wrote in his emailed announcement. “To compete, we must edit, shift and divest less critical work to create greater focus and capability for what matters most.”
For Nike, meaning reinvestment in areas of growth and streamlining budgets. As recently as its last earnings call in December, Nike chief financial officer Matthew Friend indicated that the corporate “saw softness in digital traffic and better levels of promotional activity across the marketplace.” He also cited “indications of more cautious consumer behavior all over the world in an uneven macroenvironment.”
Timeframe for Nike’s job cuts
The worldwide layoffs will occur in two phases, CNBC reported. The primary of those would begin Friday, with the second ending by the point Nike’s fiscal fourth quarter concludes.
The workforce reductions referenced within the Thursday memo would follow reported cuts from November and December, as reported by The Oregonian. The full variety of employees laid off during that point was unknown.
Nike reported having 83,700 employees worldwide as of May 31, 2023.
Where layoffs will occur
Specific departments weren’t named within the memo, though recent leadership changes have touched design, innovation, marketing and technology operations, The Wall Street Journal reported. Earlier cuts reported by The Oregonian encompassed brand, engineering, human resources, innovation, recruitment and sourcing divisions.
Cuts in Europe, the Middle East and Africa would occur on unique timelines in observance of local labor laws. Meanwhile, retail and warehouse employees weren’t expected to be included within the cuts.
In a Nike statement shared with Complex, the corporate named areas of strength where it hopes to construct, at the same time as the workforce reduction continues.
“Nike’s all the time at our greatest after we’re on the offense,” the Nike spokesperson said. “The actions that we’re taking put us within 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.”
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