Nike To Lay Off Over 1,600 Employees: Report

"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," Donahoe said in the memo

The layoffs are anticipated not to impact the employees working in stores, distribution facilities, or those within the company's innovation team

Source : Getty

The sports brand Nike announced on Thursday its plans to reduce its workforce by approximately 2 per cent, which equates to over 1,600 jobs, in response to lower profits reported this year. The sportswear giant aims to trim costs amidst challenging financial performance, as per a report in The Wall Street Journal.

In an internal memo to employees sourced by The Wall Street Journal, Nike's Chief Executive, John Donahoe, stated that the company is allocating its resources to increase investment in categories such as running, women's apparel, and the Jordan brand.

"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," Donahoe said in the memo.

According to the report, the layoffs are anticipated not to impact the employees working in stores, distribution facilities, or those within the company's innovation team. As of May 31, 2023, the company employed approximately 83,700 employees around the world.

Furthermore, the report also indicates that the layoffs will commence on Friday, with a second phase expected to conclude by the end of the current quarter. The announcement of job cuts follows Nike's declaration in December of last year, where it outlined plans to reduce costs by up to $ 2 billion over the next 3 years. The company stated its intention to streamline its organisation to achieve these saving goals.

According to the company's data, sales saw only a 1 per cent increase through November 30 compared to the previous year, with footwear sales experiencing a five per cent decline in North America, Nike's largest market.

Similarly, Nike's international counterparts, including Adidas, Puma, and JD Sports, have also reportedly cautioned about lower earnings in the current year, attributing it to reduced consumer spending on non-essential items.