Nike Axes Headcount To Save Cost, Cuts Over 1,600 Jobs: Report

Yesterday, Nike Inc NKE reportedly stated its plan to curtail around 2% of its workforce, or over 1,600 jobs, to save costs.

Nike Chief Executive John Donahoe said the company will use resources to boost investment in categories like running, women’s apparel, and the Jordan brand, reported The Wall Street Journal.

Read: Air Jordan Shoes Too Expensive? This Retailer Lets Consumers Rent To Own, ‘Walk Now, Pay Later’

As per the report, the headcount reduction will not impact employees in stores and distribution centers or those in its innovation team.

As of May 31, 2023, the company had approximately 83,700 employees globally.

Donahoe said in the memo, “This is a painful reality and not one that I take lightly. We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.” 

“To compete, we must edit, shift and divest less critical work to create greater focus and capacity for what matters most.”

The company anticipates starting layoffs on Friday, with the second phase projected to be completed by the end of the quarter. 

Also Read: Fitness In 2024: If You’re Going To ‘Just Do It’ — Do It Together

In December, Nike reported second-quarter FY23 revenue of $13.39 billion, missing the street estimate of $13.43 billion. 

Also, the company stated that it is assessing opportunities to deliver up to $2 billion in cumulative cost savings during the next three years.

The company disclosed expecting revenue to be slightly negative in the third quarter and reported revenue to be up low single digits in the fourth quarter, with full-year reported revenue to grow about 1%. The guidance reflects rising macro headwinds, mainly in Greater China and EMEA.

Also Read: Tiger Woods Ends Over 25-Year Run With Nike: What’s Next For The Golf Legend?

Price Action: NKE shares are down 0.65% at $105.36 premarket on the last check Friday.

Photo via Shutterstock.