Nike is facing a tough year, and recent government filings reveal that the company has seen more job cuts than expected. Reports submitted to the SEC on July 25th showed that Nike’s workforce has reduced by 4,300 employees compared to the previous year, exceeding the approximately 1,600 layoffs announced in February 2023.
Initially, Nike had planned to cut two percent of its staff, but the filings show that its workforce is now five percent smaller than it was last year. This significant reduction has had a notable impact on Nike’s operations and stock performance.
The recent job cuts have particularly affected top-level employees, with 40 percent of the cuts impacting vice presidents, directors, or senior directors, totaling 318 out of 700 job losses. Furthermore, Nike’s stock fell by 20 percent in one day in late June due to the workforce reduction. The company also made significant job cuts in its sustainability sector, which received criticism.
In addition to the layoffs, Nike’s CEO, John Donahoe, took an 11 percent pay cut, reducing his compensation to $29.1 million.
Despite the challenges, Nike has had some positive developments in 2024. The company signed rising American sports star Caitlin Clark to a $28 million shoe deal and is sponsoring numerous athletes for the Olympics. However, these moves have not been sufficient to satisfy investors. Following a disappointing quarterly earnings report in late June, Nike’s shares dropped by over 11 percent.
As Nike deals with these challenges, the company continues to face ongoing difficulties in balancing workforce reductions, financial performance, and investor expectations.
