While Nike is gearing to lay off hundreds from its workforce to cut costs of up to $2 billion, it will be spending about $400 million in severance pay to the impacted employees. The job cuts will come into effect before the start of 2024.That means, the layoffs will be implemented within this week.
The last time the company decided to trim its workforce, about 700 employees had been rendered jobless amidst the pandemic, in 2020.
As per media reports this second major layoff round is because the company has been forced to take measures to cut costs across various divisions due to dwindling sales. Sales over the last quarter have gone up merely by one per cent. In 2017, Nike had trimmed its workforce by about 745 in Oregon, where it happens to be the largest company. Globally, Nike has a workforce of well over 83,000 as of 31 May..
While the profit margins had improved there is uncertainty regarding the company’s retail business. Additionally, the share prices of the company tanked too, falling by ten per cent. This latest round of layoffs, which is being projected as a restructuring exercise is expected to help make the processes more efficient, effective and smooth within the organisation.
On 6 December 2023, the employees received an email in which Nike outlined several executive changes aimed at speeding up decision-making and addressing consumer needs.
