Nike CEO John Donahoe told employees in an email late Thursday that the company would lay off 2% of its workforce, a figure that suggests the company could cut more than 1,500 jobs.
The sportswear giant had 83,700 employees as of May 31. The layoffs will not affect the company's stores, distribution centers or U.S. manufacturing facilities where the company makes the Air insoles for shoes, according to Donahoe's email. That means the layoffs could have an outsized impact on the company's 1,000-acre headquarters near Beaverton, which employed 11,400 people last spring.
The layoffs will begin Friday morning and continue through next week. Nike's fiscal quarter ends February 29th. The company expects further layoffs in the next quarter, which ends May 31.
“This is a painful reality and I do not take it lightly,” Donahoe said in the email. “We are not performing at our best right now, and ultimately I take responsibility for myself and my leadership team.”
Willamette Week first reported the contents of Donahoe's email.
Nike did not immediately respond to messages seeking comment but provided a statement to Footwear News.
“Nike is always at its best when we are on the offensive. The actions we are taking enable us to right-size our organization to capitalize on our greatest growth opportunities as interest in sports, health and wellness has never been greater,” the company said. “Although these changes will impact approximately 2% of our total workforce, we are grateful for the contribution of all Nike teammates.”
In December, Nike said it planned to cut costs by $2 billion over the next three years to regain lost momentum. As part of the announcement, the company said it would incur up to $450 million in restructuring charges in the quarter ending Feb. 29, primarily from severance costs.
In his email Thursday, Donahoe said Nike would be “as supportive as possible” and that the company would provide laid-off employees with a “comprehensive package” that includes financial, health and outplacement support.
Nike was in crisis. In December, the company forecast that sales would rise only about 1% in the fiscal year ending May 31. It has lost market share to smaller, more agile brands like Hoka and On.
The Oregonian/OregonLive reported in December ongoing layoffs at the company in areas such as human resources, recruiting, procurement, brand, technology, digital products and innovation.
Nike has made other changes to gain traction. New heads of innovation, design, marketing and technology were announced in November. This announcement followed a leadership change in May that was intended to help the company develop the next “game-changing innovation.”
In December, Donahoe said the cost reduction would allow the company to invest in growth areas of the company, such as women's products, the Jordan brand and running apparel.
Donahoe reiterated those priorities in his Thursday email.
“This is how we will reignite our growth,” Donahoe wrote.
In 2020, the company laid off 700 employees in Oregon as part of a restructuring intended to make the company more flexible. In 2017, Nike cut 745 jobs here.
– Matthew Kish covers companies including the sportswear and banking industries. Reach him at 503-221-4386, [email protected] or @matthewkish.
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