Nike to lay off 2% of its workforce in broad restructuring

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Nike, the iconic sneaker giant, is embarking on a strategic workforce restructuring, aiming to optimise resources and reinvest in key growth areas amidst a challenging retail landscape. As part of this initiative, the company is streamlining operations and cutting approximately 2% of its current workforce, totaling more than 1,500 jobs.

CEO John Donahoe emphasised the importance of this restructuring in reigniting growth and propelling Nike forward. “This is how we will reignite our growth,” he stated in a memo obtained by CNBC, highlighting the company’s commitment to adapting to market dynamics and capitalising on emerging opportunities.

The restructuring plan aligns with Nike’s broader strategy to refocus its investments on growth drivers, including running, women’s, and the Jordan brand. By reallocating resources to these strategic priorities, Nike aims to enhance its competitiveness and drive sustainable growth in a rapidly evolving market.

The layoffs will be implemented in two phases, with the first round commencing immediately and the second phase concluding by the end of Nike’s fiscal fourth quarter. While specific departments affected by the layoffs have not been disclosed, Nike assured that retail employees and warehouse workers would not be impacted.

This strategic move comes amidst changing consumer behaviour and a shift in demand for discretionary goods like apparel and footwear. Nike’s proactive approach to cost management and operational efficiency reflects its commitment to weathering market uncertainties and maintaining its leadership position.

In December, Nike unveiled a comprehensive restructuring plan aimed at reducing costs by $2 billion over the next three years. The company’s focus on simplifying product assortments, increasing automation, and leveraging technology underscores its dedication to driving greater efficiency and agility in its operations.

Despite near-term challenges, Nike remains confident in its ability to navigate market headwinds and emerge stronger. Donahoe reassured laid-off employees that they would receive comprehensive support, including financial assistance, healthcare benefits, and outplacement services.

As Nike continues to adapt to evolving consumer trends and market dynamics, the company remains steadfast in its mission to serve athletes and drive the future of sport. Through strategic workforce restructuring and targeted investments, Nike is poised to capitalise on new opportunities and drive sustainable growth in the ever-changing retail landscape.