Nike Implements Workforce 1500 jobs Reduction Amid Restructuring Plans
Sportswear giant Nike has announced a reduction in its workforce, amounting to 2% of its current employees, totaling more than 1,500 jobs. This move is part of a broader restructuring effort aimed at reallocating capital towards growth areas such as running, women’s products, and the Jordan brand.
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CEO John Donahoe emphasized the necessity of these measures in reigniting growth, acknowledging the challenges faced by the company. The layoffs will occur in two phases, with the first round beginning immediately and the second phase to be completed by the end of Nike’s fiscal fourth quarter in May. However, layoffs in the EMEA region will follow a different timeline in accordance with local labor laws.
While the specific departments affected by the layoffs remain unspecified, Nike assured that retail employees and warehouse workers would not be impacted. This move comes amidst a cautious consumer spending environment and a slowdown in demand for discretionary items like apparel and footwear.
Nike’s restructuring plan, announced in December, aims to trim costs by $2 billion over three years. This includes streamlining product assortment, increasing automation and technology integration, and simplifying the organizational structure. Reports suggest that the restructuring was preceded by discreet layoffs across various divisions, indicating a broader overhaul within the company.
Despite these challenges, Nike remains committed to supporting laid-off employees with comprehensive financial and healthcare packages. CEO Donahoe expressed confidence in Nike’s ability to emerge stronger from this restructuring, reaffirming the company’s dedication to serving athletes and advancing the future of sports.
However, market analysts like Oppenheimer have downgraded Nike’s rating and lowered price targets, citing sluggish consumer demand and competitive pressures. Nonetheless, Nike remains determined to navigate these transitions and position itself for long-term success in the evolving retail landscape.
Source: CNBC NEWS
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