Bad News: Nike to Conduct Mass Layoffs

Nike, the sportswear and footwear company, will lay off approximately 1,500 employees, roughly 2% of its total workforce.

"This (layoff decision) is a painful reality, and I don't take this matter lightly," said Nike CEO John Donahoe, as reported by CNBC International on Friday, February 16, 2024.

According to CNBC International, Nike is conducting this mass layoff as part of a company restructuring following a slowdown in consumer spending.

Their financial reports show a decline in profits over the past two years.

In fiscal year 2021, Nike recorded earnings before interest and taxes (EBIT) of approximately US$6.92 billion.

This decreased to US$6.86 billion in fiscal year 2022 and further reduced to approximately US$6.2 billion in 2023.

Amidst these conditions, Nike is reportedly undertaking the first phase of layoffs in February 2024, with the second phase to be completed by the end of their fiscal fourth quarter, ending in May.

CNBC International stated that Nike has not yet specified which departments will be affected by the layoffs. However, Nike confirmed that retail store employees and warehouse workers will not be impacted.

Previously, in December 2023, Nike launched a large-scale restructuring plan to cut costs by approximately US$2 billion over the next three years.

They also lowered sales targets to anticipate decreased demand and reduced operational costs by simplifying product offerings, increasing automation and technology use, and streamlining the company's management layers.