Nike Initiates Global Workforce Reduction by 2% Amidst Intensifying Competition

Nike Inc. has announced a reduction of approximately 2% in its global workforce as part of its ongoing cost-cutting strategy to combat a challenging sales outlook and increased competition in the sportswear industry. 

While the exact number of affected employees hasn’t been disclosed, Nike currently employs about 83,700 people globally.

The move is a response to a weaker sales outlook and the need to navigate heightened competition. In a statement, Nike emphasized that these actions are aimed at optimizing the organization’s size to capitalize on significant growth opportunities, particularly in the context of growing interest in sports, health, and wellness.

This decision follows the company’s announcement in December, outlining plans to achieve up to $2 billion in cost savings. The cost-cutting measures involve streamlining the product lineup and simplifying operations. However, this news led to a decline in Nike’s shares, which have struggled to recover, remaining down approximately 2% this year.

The job cuts will be implemented in two phases, with the first phase starting this week and extending into the next, while the second phase will conclude by the end of Nike’s fourth quarter. 

As part of the reduction, Nike expects to incur employee severance costs in the range of $400 million to $450 million in the third quarter.