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Nike is cutting staff as it tries to get back on course.
Chief executive John Donahoe told employees in an internal email seen by The Business of Fashion that the sports giant will lay off about 2 percent of its total workforce. The company has been struggling with its worst slump in years as it’s become increasingly reliant on a handful of retro styles and lost some of the marketing flair that helped it become the world’s biggest sneaker brand.
The move follows on Nike’s announcement in December that it would cut up to $2 billion in costs over the next three years. Among the areas of savings it mentioned was streamlining its organisation. At the time the company reported sales growth of just 1 percent in the quarter through November 30 compared to the previous year, including a 5 percent drop in footwear sales in North America, its biggest category in Nike’s biggest market.
”We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable,” Donahoe wrote in the email.
The email noted that Nike would redirect the resources towards investment in its most important categories and growth opportunities, including running, women’s and its Jordan brand.
”This is how we will reignite our growth,” it said.
The layoffs will take place in two phases. The first began this week, according to the email. The next will begin by the end of Nike’s fourth quarter.
The company had approximately 83,700 employees globally as of May 31, 2023.
Learn more:
How Nike Ran Off Course
The American sportswear giant is experiencing its worst slump in a decade. New competition is part of the problem but according to industry insiders and athletes, many of Nike’s wounds are self-inflicted: the results of disruptive restructurings, stalled innovation and uninspiring marketing.
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