Nike India slashes 20% staff, downsizes operations
Nike has fired nearly 20% staff from its operations in India, and has asked many other employees to shift to its operations in Southeast Asia. The move comes as the sports brand is tackling rising losses and stiff competition from players such as Adidas. The downsizing is part of the company's restructuring plan that focuses on 12 cities to clock 80% growth by 2020.
In June this year, Nike announced that it is looking to cut about 1,400 jobs in an effort to aggressively expand their digital presence. The sneaker maker said it was planning to slash nearly a quarter of its products off its label, and only focus on hot sellers. The move is intended to help the sports brand sell more products online to customers.
The Oregon-headquartered sports brand has been seeing its sales decline over the previous two years. In the financial year 2015-2016, Nike's losses in India increased to Rs. 170 crore from Rs. 101 crore in the year 2014-2015, prompting the company to shut 35% of its stores in the country. Analysts dropped the 2017 full-year sales outlook for the company to 2% loss, reports said.
"Wrong marketing investments leading to poor return on investments has been a problem for Nike in India," said senior executives. "The company's retail expansion strategy has also not worked according to plan," they said. Nike had also pulled out of multiple cricket bat sponsorship deals.
