Nike announces second layoffs in 4 months, 1,400 jobs cut
What's the story
Nike has announced a fresh wave of layoffs, impacting some 1,400 employees globally. The majority of the cuts will be from its technology department. This is the second major job cut exercise by the company this year, after it let go of about 775 employees in January. These changes are part of Nike's "Win Now" strategy to reshape its technology team and modernize operations across various departments.
Strategic shift
Nike's turnaround plan
The "Win Now" strategy involves reshaping the company's technology team, modernizing Air manufacturing, moving some Converse Footwear operations, and integrating materials supply chain work into footwear and apparel supply chain teams. COO Venkatesh Alagirisamy said these changes will lead to a reduction of around 1,400 roles in global operations with most being from the tech department.
Workforce reduction
Layoffs to impact North America, Asia, Europe employees
The latest round of layoffs will affect employees across North America, Asia, and Europe. However, it must be noted that these cuts account for less than 2% of Nike's total global headcount. A company spokesperson said the job cuts are aimed at better positioning the organization for the current pace of sports and accelerating its growth.
Leadership changes
CEO Elliott Hill leading the turnaround effort
Nike's CEO Elliott Hill has been at the helm of this turnaround effort after years of declining sales. Though he has made some initial progress, there have been a few bumps along the way. The company had also announced job cuts last summer that affected less than 1% of its corporate staff as part of its business realignment efforts.
Market outlook
Nike warns of continued sales decline
In its third fiscal quarter earnings report last month, Nike had warned of a continued decline in sales for the rest of the year. This is mainly due to an expected 20% drop in China during the current quarter. Nike's shares rose 0.5% in extended trading on Thursday after the latest layoff announcement. However, it's worth noting that the stock has fallen by 30% this year alone.