Tough Conditions Prompt Nike to Lay Off Thousands of Employees
Nike is once again implementing redundancies as part of its efficiency drive. The American sportswear company has announced it will cut around 1,400 employees globally, or less than 2% of its total workforce.
In an internal memo, Nike’s Chief Operating Officer, Venkatesh Alagirisamy, stated that this step is being taken to streamline operations, particularly in the technology sector across North America, Asia, and Europe.
This redundancy round continues from the previous wave. In January, Nike had already cut around 775 positions to accelerate automation processes.
Amid this news, Nike’s shares rose slightly by about 0.5% in after-hours trading. Nevertheless, over the past three years, the company’s share value has eroded by more than 50%, in line with increasing competition from more aggressive brands such as On, Hoka, and Anta.
Nike’s CEO, Elliott Hill, who began his tenure in 2024, is working to refocus the company on core sports like running and football. He is also pushing for the launch of innovative products to boost competitiveness.
However, pressure on margins remains high as Nike must offer significant discounts to clear old stock. Efforts to introduce new products have not yet fully succeeded in consistently attracting market interest.
One successful product is the Nike Vomero 18 shoe, which recorded sales of US$100 million, or approximately Rp1.7 trillion, in the three months since its launch.
Looking ahead, Nike forecasts sales to decline by around 2% to 4% in the current quarter. Even the Chinese market, one of its key pillars, is projected to see a drop of up to 20%.
Morningstar analyst David Swartz assesses this situation as indicative of deeper problems than anticipated. “Nike should be further along in its recovery by now,” he said.
He also added that the company is likely overstaffed due to previous management strategies.
In agreement, M Science analyst Drake MacFarlane described the news as significant but not surprising. “This is big news but not unexpected,” he said.
That said, Nike has not yet disclosed in detail the cost savings from this redundancy action. Moving forward, the company plans to integrate its supply chain for materials, footwear, and apparel, while centralising technology operations in two main hubs: its headquarters in Beaverton, Oregon, and a technology centre in India.