Job cuts were expected to begin at the apparel and shoe brand Nike on Friday, following a Thursday announcement and circulated memo. The Nike layoffs will reportedly hit 2% of its total workforce, impacting more than 1,500 employees.
“This is a painful reality and not one that I take lightly,” Nike CEO John Donahoe said in the memo. “We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.”
Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales.
Why Nike layoffs are happening
Nike’s layoffs come as part of an ongoing restructuring effort announced in December 2023. In that plan, the company outlined its intent to cut $2 billion in costs over three years.
“While interest in sport, health, wellness and comfort has never been stronger, we are in a highly competitive industry where speed and end-to-end execution is critical to win,” Donahoe wrote in his emailed announcement. “To compete, we must edit, shift and divest less critical work to create greater focus and capacity for what matters most.”
For Nike, that means reinvestment in areas of growth and streamlining budgets. As recently as its last earnings call in December, Nike chief financial officer Matthew Friend indicated that the company “saw softness in digital traffic and higher levels of promotional activity across the marketplace.” He also cited “indications of more cautious consumer behavior around the world in an uneven macroenvironment.”
Timeframe for Nike’s job cuts
The global layoffs will occur in two phases, CNBC reported. The first of those would begin Friday, with the second ending by the time Nike’s fiscal fourth quarter concludes.
The workforce reductions referenced in the Thursday memo would follow reported cuts from November and December, as reported by The Oregonian. The total number of workers laid off during that time was unknown.
Nike reported having 83,700 employees worldwide as of May 31, 2023.
Where layoffs will occur
Specific departments were not named in the memo, though recent leadership changes have touched design, innovation, marketing and technology operations, The Wall Street Journal reported. Earlier cuts reported by The Oregonian encompassed brand, engineering, human resources, innovation, recruitment and sourcing divisions.
Cuts in Europe, the Middle East and Africa would occur on unique timelines in observance of local labor laws. Meanwhile, retail and warehouse workers were not expected to be included in the cuts.
In a Nike statement shared with Complex, the company named areas of strength where it hopes to build, even as the workforce reduction continues.
“Nike’s always at our best when we’re on the offense,” the Nike spokesperson said. “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.”
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