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Nike will begin cutting an estimated 1,600 jobs, or 2% of its workforce, this week, including several senior leaders in technology and marketing. These include Vice President of Technology, Innovation and Marketing and Senior Director of Nike's Office of Technology Innovation.
The layoffs came as Nike's stock price plummeted (down 13% from the previous year) and sales growth slowed. In December, the company announced a 1% increase in sales, which was the second consecutive quarter that fell short of expectations. Nike also lowered its sales forecast for this year and announced a plan to cut costs by $2 billion over three years. External factors such as lower consumer spending and increased competition from smaller trainer brands have been blamed for Nike's recent struggles, which analysts also blame on a series of missteps that have thrown the brand off track. .
Layoffs are a faster way to restore revenue than increasing sales. The significant layoffs in technology and marketing departments also come after the company brought in new CTO Muge Erdirik Dogan (who most recently led Amazon Fashion) and CMO Nicole Hubbard Graham late last year. Ta. Following this week's round of layoffs, a second round of layoffs is expected to be completed by the end of the fourth quarter, which in Nike's case will be in May. (According to the company, distribution center, Nike Air manufacturer and store employees are not included in the layoffs.)
A long-time leader in sportswear, Nike has also been at the forefront of digital innovation. In recent years, the company has cut wholesale distribution in favor of its own channels, developed a series of apps such as the Snkrs app to drop coveted merchandise, invested in high-tech his stores, and made an early acquisition of Web3. Actively working on his Web3 including. brand Rtfkt and subsequently developed his own Web3 studio, Nike Virtual Studios (NVS).
In an internal memo shared with vogue business, CEO John Donahoe said Nike often wins by offering innovative products, unique storytelling and differentiated marketplace experiences, and believes these areas require renewed focus. suggested something. “Winning is about speed and end-to-end execution. To compete, you need to edit, change, and sell less important work to increase your focus and ability to do what matters most. ”
