Nike intends to lay off 2% of its employees due to declining revenues

Nike intends to lay off 2% of its employees due to declining revenues

Sports shoes and clothing company Nike will lay off 2% of its workforce starting Fridaywhich is equivalent to about 1500 peopleas sent by its CEO John Donahue on Thursday in a message to all employees that was echoed by various media outlets.

“It is a painful reality and I do not take it lightly. We are not at our best right nowAlthough he has not resigned from his position over the situation, “ultimately I hold myself and my team accountable,” Donahue says.

The company, headquartered in Portland (Oregon), employs 15,500 people there, and a total of 83,000 employees worldwide. The layoffs will be implemented in two phases: One during the second half of February and the other in May.

Last December, he warned that this was necessary Reduce costs by up to $2 billion over the next three years In the face of weak results, he did not rule out layoffs. In a new strategy, Nike wants to focus on women's items and its Jordan-branded shoe line, one of the most successful in recent years. Wall Street punished Nike shares after the layoff plan became known.

Increase profits

Last December, Nike announced a modification plan worth up to $2 billion, which included… -Dismissal from work despite registration Increase in profits. According to its calculations, it achieved a net profit of $1,578 million (1,438 million euros) in the second fiscal quarter, an increase of 18.5%. However, the company then warned of weak income for the rest of the year and presented an adjustment plan.

Nike indicated at the time that it had determined Opportunities for cost savings With a cumulative amount of up to $2,000 million (€1,823 million) in the next three years through simplification of the product variety, greater automation and improvement of the organization.

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In this regard, the company said that the majority of these savings will be invested to drive future growth, accelerate innovation quickly and at scale, and achieve greater profitability in the long term. Thus, the company stated that it is taking steps to streamline the organization it will generate Extraordinary expenses Restructuring between $400 and $450 million (364 and 410 million euros) will be largely recognized in the third quarter of fiscal 2024, “mainly related to employee compensation costs.”

Regarding the results of the multinational company, between September and November, Nike's second fiscal quarter, net profit rose by 18.5% year-on-year, reaching $1,578 million (1,438 million euros), while revenues add 13,388 million euros. Dollars (12,201 million euros), an increase of 0.5%. In this way, in its first fiscal half, Nike achieved net profits of $3,028 million (2,759 million euros), an increase of 8.2%, and a turnover of $26,327 million (23,993 million euros), an increase of 1.2%.

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