Nike Inc. to Cut Over 1,600 Jobs

Nike Inc. is planning to reduce its workforce by more than 1,600 employees in order to create room for increased profitability and innovation. According to The Wall Street Journal, this decision will not impact employees working in stores, distribution centers, or involved in innovation.

Streamlining Organizational Structure

This news follows Nike's announcement two months ago during its second-quarter earnings call that it aims to achieve $2 billion in cost cuts over the next three years. The company expressed its intention to streamline its organizational structure by reducing management layers.

Impact on Stock and Workforce

Nike's stock fell by 0.6% during premarket trading on Friday. Overall, the stock has experienced a 13.4% drop since reporting its second-quarter results in December last year. With 83,700 employees as of May 31, the reported job cuts would represent approximately 2% of Nike's total workforce.

Driving Efficiency and Productivity

In December, Nike provided examples of its cost-cutting efforts, which included lowering operational costs, leveraging data and technology to increase automation and speed, optimizing the supply chain, and enhancing procurement capabilities. The company plans to reinvest the majority of these savings into areas that will have the greatest consumer impact and drive growth.

Looking Ahead

Nike's stock performance has declined by 14.7% over the past year, while the Consumer Discretionary Select Sector SPDR ETF has seen a 19.6% increase and the Dow Jones Industrial Average has advanced by 15.1%.