April 23 (Reuters) - Nike said on Thursday it was reducing about 1,400 roles in its global operations team, as the sportswear giant looks to boost its profits. The reductions will mainly affect North
Struggling Nike will cut around 1,400 jobs in efficiency push
Nike Announces Major Layoffs Amid Ongoing Sales Challenges
By Nicholas P. Brown
April 23 (Reuters) - Nike said on Thursday it is laying off about 1,400 people to streamline workflows, as the struggling sportswear company fights through a years-long sales slump.
Details of the Layoffs
In a memo to employees on Thursday, Chief Operating Officer Venkatesh Alagirisamy said Nike would cut jobs in global operations - mainly technology - in North America, Asia and Europe, accounting for a little less than 2% of the global workforce.
Previous Job Cuts and Automation Efforts
It is the latest in a string of job cuts at Nike, most recently the axing in January of 775 roles in a bid to speed up automation.
Market Reaction and Competitive Landscape
Shares edged up about 0.5% in after-hours trading. Nike shares have lost more than half their value in the last three years, as nimbler competitors like On, Hoka and Anta have won more shelf space.
CEO Elliott Hill's Strategy
CEO Elliott Hill, who took the helm in 2024, has vowed to re-center the Nike brand on core sports like running and soccer, and bring new and innovative shoes to market quickly.
Challenges with Margins and Product Launches
Margins have remained pressured as Nike has used steep discounts to work through old inventory. Meanwhile, efforts to wow the market with new, must-have sneakers have been inconsistent.
Last year, Hill said turning Nike around would depend on the company delivering "something new to the consumer week after week," but new rollouts have yet to move the needle, with the exception of the Vomero 18 shoe, which launched last year and reached $100 million in sales in three months.
Financial Outlook and Regional Performance
Nike has forecast a 2% to 4% drop in sales in the current quarter. China, its primary trouble spot, is expected to fall 20% in the quarter, Nike has said.
Analyst Perspectives on the Layoffs
Thursday's layoffs signal "that problems run deeper than originally thought," said Morningstar analyst David Swartz.
"Nike should be further along in its recovery by now," he said, adding that Nike may be overstaffed "as prior management tried to solve problems by adding people, especially in technology."
Nike had said in a March SEC filing that headcount adjustments could be coming. "It’s a big headline but not surprising," said Drake MacFarlane, an analyst with M Science.
Operational Changes and Future Focus
A Nike spokeswoman declined to provide a cost-savings figure for the layoffs.
The cuts will allow Nike to better integrate its supply chains for materials, footwear and apparel, and to focus its technology operations in two main hubs - its Beaverton, Oregon, headquarters, and the Nike India Technology Center - according to Alagirisamy's memo.
(Reporting by Koyena Das in Bengaluru; Editing by Vijay Kishore, Rod Nickel and David Gregorio)
