Nike to Cut 2% of Workforce
Nike Plans to Cut 2% of Its Total Workforce
Nike announced on Thursday that it will be cutting approximately 2% of its total workforce, which equates to more than 1,600 jobs. This decision comes as the sportswear giant aims to reduce costs after experiencing weaker profits this year.
Nike Takes Steps to Address Weaker Earnings
Global peers of Nike, including Adidas, Puma, and JD Sports, have also warned of weaker earnings due to reduced consumer spending on non-essential items. In December, Nike revealed a $2 billion cost-saving plan over the next three years, involving actions such as tightening product supply and enhancing its supply chain.
Nike’s Savings Plan and Employee Severance Costs
The company had outlined a $2 billion savings plan, including steps to streamline the supply of certain products, optimize the supply chain, and increase automation. Additionally, Nike expects to incur employee severance costs of about $400 million to $450 million in the third quarter.
Impact on Nike’s Employees
As of May 31, 2023, Nike had roughly 83,700 employees. The layoffs are anticipated to commence on Friday, with a second phase anticipated to be completed by the end of the current quarter. However, employees working in stores, distribution centers, and the innovation team are not expected to be affected by the layoffs.
