Nike Plans To Cut 700 Positions From HQ Workforce

0 24

As part of a wider reorganization announced in the summer of 2019, Nike plans to cut 700 positions at its headquarters by January, Oregon Live reported.

The 700 reductions were unveiled in a short legal filing with the state. Nike had previously estimated that its Oregon layoffs would number approximately 500.

“We are building a flatter, nimbler company and transforming Nike faster to define the marketplace of the future,” Nike noted in a statement, per the outlet. “Through this process, we are leading with our values and are committed to acting with compassion and respect for our employees.”

The company’s Oregon layoffs include 200 at the firm’s childcare facility, which is shuttering for good.

Over the summer, Nike announced that it would spend as much as $250 million reducing jobs around the world, as its new chief executive retargets the firm’s business to put the focus on direct-to-consumer eCommerce sales.

“Consumer Direct Acceleration,” which is Nike’s new business strategy, moves sales from third-party merchants and toward more lucrative sales channels under the firm’s direct control.

The company has reorganized its business to home in on women’s, men’s and kids’ merchandise categories.

Nike’s first-quarter reported revenues were $10.6 billion, down just 1 percent compared to last year’s numbers. Its digital sales, however, spiked 82 percent. Women’s apparel digital sales jumped 200 percent.

The Nike Training Club app saw over 50 percent of its members globally start to work out in Q1. Moreover, the Nike Running Club has experienced four straight months of over one million downloads for its audio-guided runs.

Even with the shipping costs and other operational overhead connected with online shopping, the firm’s gross margin dropped just 3 percent, essentially flat compared to last year, going from $4.8 million to $4.7 million.

“We are seeing a benefit from increased digital penetration on our margins,” said Nike Executive Vice President and Chief Financial Officer Matthew Friend on the earnings call.

Leave A Reply

Your email address will not be published.