Nike’s corporate headquarters in Oregon will witness the second phase of layoffs commencing on June 28, according to a Worker Adjustment and Retraining Notification filing made on Friday. This round of layoffs is part of the 2% reduction in the workforce that Nike announced in February, which is being implemented in two phases. Following the layoffs in June, a total of approximately 740 employees will have been affected at Nike’s Oregon headquarters across both phases, as indicated in the filing. Nike mentioned that details regarding job titles and the number of affected employees in each category will be provided later, once the company finalizes them. It’s worth noting that impacted employees will not have bumping rights.
Nike emphasized that these actions are aimed at aligning the organization to pursue its significant growth opportunities, particularly in the areas of sport, health, and wellness, which are currently experiencing increased interest. The company expressed gratitude for the contributions of all Nike teammates despite the challenges posed by the layoffs.
These layoffs are part of a cost-saving initiative unveiled by Nike in December, with the goal of achieving up to $2 billion in cumulative savings over three years. Considering the company’s last annual report, the layoffs affecting 2% of its total workforce are expected to impact more than 1,600 individuals. The savings generated from this initiative will be reinvested to drive growth, innovation, and profitability.
The decision to implement these layoffs comes as Nike reassesses its strategy following challenges related to its direct-to-consumer (DTC) focus. CEO John Donahoe acknowledged in March that Nike is not performing at its full potential and pledged to make necessary adjustments to its DTC strategy. CFO Matt Friend noted that the company has already begun streamlining support and operating functions while reducing management layers. Nike is shifting its focus towards areas like design, product creation, and merchandising, prioritizing bolder marketing, wholesale partnerships, and enhanced product innovation. As part of this effort, Nike recently introduced a new innovation cycle concentrating on enhancements to its Air franchise. Additionally, the company has been revisiting partnerships with wholesale retailers it had previously scaled back from and has made key hires, including a new vice president of men’s apparel design.