Beaverton, OR – Nike Inc. unveiled a significant corporate restructuring plan on Thursday, which includes laying off approximately 1,500 employees globally, equating to 2% of its workforce. The leading athletic brand aims to reinvest resources into key growth areas like running, women’s products, and Jordan Brand through this move.
“This restructuring is essential for reigniting our growth,” said Nike CEO John Donahoe in an internal memo obtained by news outlets. “We must become simpler and faster to drive efficiency, and we will invest where we can make the biggest impact.”
The job cuts will occur in two phases, starting this week and finishing by late May. The restructuring will impact Nike’s operations across the board, except for retail and distribution center jobs. Laid-off employees will receive severance packages.
This announcement comes on the heels of Nike missing sales estimates last quarter and predicting further softening of demand for its products. The company is battling broader economic headwinds like inflation and pullbacks in consumer discretionary spending.
Analysts see the restructuring as a necessary belt-tightening measure during uncertain times. “While Nike’s brand remains strong, the company faces near-term sluggishness in demand and production innovation,” said John Smith, an analyst at Oppenheimer. “Becoming more efficient positions Nike well for long-term growth.”
Nike aims to save $2 billion over the next few years through this reorganization. Donahoe expressed confidence Nike will “emerge stronger” through optimizing operations to fulfill its mission of serving athletes worldwide.
