Nike is preparing to cut costs of up to $2 billion by laying off hundreds of its employees. The company will be spending about $400 million in severance pay to the impacted employees. The job cuts will come into effect before the start of 2024, which means the layoffs will be implemented within this week. In 2020, Nike had laid off about 700 employees amidst the pandemic, and this is the second major layoff round.
As per media reports, the layoffs are due to dwindling sales, and the company has been forced to take measures to cut costs across various divisions. Sales over the last quarter have gone up by merely one per cent, and the company’s share prices have fallen by ten per cent. In 2017, Nike had trimmed its workforce by about 745 in Oregon, where it happens to be the largest company. Globally, Nike has a workforce of well over 83,000 as of 31 May.
The profits had improved, but there is uncertainty regarding the company’s retail business. This latest round of layoffs is being projected as a restructuring exercise to make the processes more efficient, effective, and smooth within the organization. On 6 December 2023, the employees received an email from Nike outlining several executive changes aimed at speeding up decision-making and addressing consumer needs.