Nike to cut over 1,600 jobs in strategic restructuring move

In a strategic effort to reduce costs, Nike announced plans on Thursday to cut its workforce by about 2%, affecting over 1,600 employees. Nike Chief Executive John Donahoe highlighted the company's focus on investing in categories such as running, women's apparel, and the Jordan brand, as revealed in an employee memo reviewed by The Wall Street Journal.

The layoffs, scheduled to begin on Friday, are part of Nike's broader plan to shave up to $2 billion in costs over the next three years. Donahoe acknowledged the challenges the company is facing, stating, "This is a painful reality, and not one that I take lightly. We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable." The reduction is not expected to impact employees in stores and distribution centers or those in the innovation team.

Nike's decision comes after the company lowered its revenue outlook for the year in December, citing concerns about consumer spending caution. The first phase of job cuts is slated to conclude by the end of the quarter, with a second phase to follow.

"To compete, we must edit, shift, and divest less critical work to create greater focus and capacity for what matters most," added Donahoe in the memo.

This development coincides with a decline in U.S. retail sales in January, following robust consumer spending during the holiday season. Nike faces increased competition from rival brands and customer concerns about its ability to deliver innovative products. Recent leadership changes in innovation, design, marketing, and technology highlight the company's commitment to adapting to evolving market dynamics.