The Swoosh is getting leaner. Nike confirmed plans to shed 740 employees at its Oregon headquarters by the end of June, marking the second phase of a previously announced 2% workforce reduction. This move aligns with the sportswear giant’s aggressive $2 billion cost-cutting plan unveiled in December 2023.
The news comes amidst a challenging economic climate and a projected “low single-digits” decline in revenue for the first half of Nike’s 2025 fiscal year (beginning June 1st). The company is streamlining its operations to capitalize on growth opportunities in the booming sport, health, and wellness sectors.
“We’re always at our best when we’re on the offense,” Nike said in a statement. “This strategic move right-sizes our organization to pursue those opportunities.”
Optimizing for Growth
This workforce reduction follows CEO John Donahoe’s February 2024 memo outlining plans to trim roughly 2% (over 1,600 employees) from Nike’s global workforce of 83,700 (as of May 2023). The company emphasizes its commitment to those impacted and expresses gratitude for their contributions.
Financial Fitness First
The layoffs are part of a broader cost-cutting initiative designed to save Nike $2 billion over the next three years. This strategy also involves product portfolio optimization, hinted at by CFO Matt Friend during the March 2024 earnings call.
While Nike’s stock price enjoyed a slight bump this past week, it remains down over 11% year-to-date and a staggering 23% over the past year. Investors will be closely watching the impact of these cost-cutting measures on Nike’s future profitability.
