Nike to slash 2% of workforce in latest cost-cutting drive

Nike to slash 2% of workforce in latest cost-cutting drive

Nike has confirmed speculation that it is restructuring its workforce, which will impact approximately 2% of its global team, as it looks to right-size the business.

NIKE following media reports it was mulling the cuts as part of broader restructuring with plans to use its capital better to invest in its growth areas, such as running, women’s and the Jordan brand.

According to a memo obtained by CNBC , Nike CEO John Donahoe said the plan would be how Nike “reignites” its growth.

The memo also reportedly cited Donahoe admitting Nike is not “performing at [its] best” and that he held himself and the leadership team “accountable”.

In its most recent set of Q2 results, Nike revealed flat sales growth of $13.3bn. Net income increased from $1.33bn to $1.58bn, an increase of 19% compared to the same period last year.

At the time, Nike said it was focusing on potential savings areas, including simplifying its product assortment, increasing automation and use of technology, streamlining its organisation, and leveraging its scale to drive greater efficiency.

According to the memo seen by CNBC, the layoffs will take place in two phases. The company will start the first round this week, and finish the second by the end of its fiscal fourth quarter, which typically concludes at the end of May. Cuts in Nike’s EMEA region will be on a different timeline based on local labour laws.

In correspondence with Just Style, a spokesperson for Nike said: “Nike’s always at our best when we’re on the offence. The actions that we’re taking put us in 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.

“While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”