Nike is currently facing significant financial difficulties, leading to a substantial reduction in its workforce. According to a report by US newspaper Oregonian, in the recently announced layoffs, Nike fired 732 senior positions, including 32 vice presidents, 112 senior directors, and 174 directors. This represents more than 40 per cent of the total jobs cut.
According to Nike's latest corporate responsibility report for the fiscal year 2023, the company employed 423 individuals in vice president or higher positions.
In addition to these layoffs, Nike's financial struggles are evident in its stock performance. On Monday, its shares fell by $2.38 to $73.05, nearing a 52-week low of $73. This marks a significant decline compared to its peak of over $177 in November 2021.
Furthermore, Nike's recent projections have added to its challenges. The company anticipates a decline in sales for the upcoming year, leading to a loss of more than $28 billion in shareholder value just ten days ago.
Meanwhile, in April, the sports giant laid off about 740 positions at its global headquarters in Oregon. Michele Adams, Vice President for People Solutions at Nike, officially notified state authorities, as required by law, that the commencement of the "second phase of impacts" at the company's headquarters is scheduled for June 28. In addition, back in February as well, the company announced its plans to cut approximately 2 per cent of its total workforce, which translates to more than 1,600 positions.
"This is a painful reality and not one that I take lightly. We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable," Nike's Chief Executive, John Donahoe, said in a memo at the time.
In March of this year, Nike projected a low-single-digit percentage decline in revenues for the first half of fiscal 2025, citing a reduction in investment in specific product lines. Similarly, global counterparts like Adidas, Puma, and JD Sports reportedly cautioned about lower earnings expectations for the current year.