Nike Lays Off More Employees as It Aims to Create ‘Flatter, Nimbler’ Company
Sheena Butler-Young
Deputy Editor
Nike Inc. has confirmed that an unspecified number of employees will be impacted by a new round of layoffs that are part of its previously announced reorganization plans.
The Beaverton, Ore.-based company, which released third-quarter results after the market close on Thursday, told local press yesterday that it’s working to create a more simplified organization but did not specify the number of workers who would be impacted by this latest reduction phase.
“We are building a flatter, nimbler company and more quickly transforming Nike to define the marketplace of the future,” Nike added in a statement to FN. “While we are not providing specific numbers, the changes occurring this week did lead to some loss of jobs, which is always difficult. We are focused on shifting resources and creating capacity to reinvest in our highest potential growth areas. This process and related timeframe will vary in certain markets based on local labor laws.”
The Swoosh had first indicated in a WARN notice for the state of Oregon last July its plans to lay off 500 workers at the HQ. In the filing, Nike said that the cuts involved some members of its corporate team and their executive assistants. In addition, 192 employees who work at the company’s two childcare centers were impacted as the brand shuttered the locations.
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In November, Nike updated that WARN notice to indicate it had increased the number of planned layoffs at its Beaverton, Ore.-based global headquarters to 700. It said at the time that it expected to complete those staff reductions by Jan. 8, 2021.
It is unclear which departments and geographies are being affected by this week’s layoffs.
Nike Inc. on Thursday delivered a mixed third quarter as port congestion delays and store closures abroad hit its balance sheet.
For the three months ended Feb. 28, the sportswear giant logged earnings that rose 71% to $1.4 billion, or 90 cents per share, trouncing the 76 cents per share analysts predicted. Revenues, on the other hand, increased 3% to $10.4 billion but fell sizably short of analysts’ forecasts of $11.02 billion.
Sales for the Nike brand fell 2% to $9.8 billion, which the Beaverton, Ore.-based company attributed to disruptions related to the COVID-19 pandemic, while Nike Digital surged 54%. (Owned and partnered digital now makes up more than 35% of Nike’s business.) Sales for Converse rose 8% to $570 million, led by “strong” digital performance in North America and Europe.
Nike unveiled its Consumer Direct Offense in 2017, a strategy that amped up its connectivity to consumers via more direct selling as well as digital innovation. In 2020, it laid out the next phase of that plan, Consumer Direct Acceleration, which is focused on increased investments in e-commerce and technology, as well as a more simplified “consumer construct” of men’s, women’s and kids’ businesses. As part of the strategy, the brand has shifted resources away from certain categories and toward digital and omnichannel.
