This article explains how Nike is going through a major restructuring where they are trying to simplify their business and go back to the basics in a way. In doing this, they will be cutting 2% of their workforce. Whilst doing this, they plan to be able to save about 3 billion over the next three years. This comes after Nike has seen slowing growth, and they are hoping that this plan will reignite their growth as a company. This being said Nike is not happy with having to do this as their CEO said, This is a painful reality and not one that I take lightly,” he added. “We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.” It will be interesting to see how this will affect their stock price shortly, but also in the long run.
https://www.cnbc.com/2024/02/16/nike-to-lay-off-2percent-of-employees-cutting-more-than-1500-jobs.html
8 comments:
I think more and more we will see this with the new AI implications. There may need to be a restructuring of jobs to help create jobs that can use AI to better help efficiency in businesses.
How does Nike's decision to simplify its business and cut 2% of its workforce reflect the company's response to slowing growth.
It's interesting that the CEO even stated the company isn't performing at their best. I wonder how much the growth of competing brands has affected Nike revenue. In the past couple years we have seen this trend of the most reputable firms starting to cut costs. The pandemic and interest rates have definitely been part of the story.
2% is a big cut with how big of a company they are. I find it interesting that they need to reinstitute growth but simplify it in order to do so, while other companies would typically expand into different markets or product lines, and they are doing the complete opposite.
I wonder what the source of the poor performance for Nike has been. In terms of everyday life Nike seems to be as popular as ever but clearly that is not a good gauge of their overall performance, however I think this approach will reignite them at least briefly.
I wonder what the severance packages look like for the recently fired employees? Also it'd be interesting to see what their next move will be if this doesn't work out.
Curious to know which jobs in particular are getting cut. If they plan to save 3 billion dollars its presumably more than just your average store worker.
This seems like a shock as Nike has been considered the biggest sports brand in the world over the last decade, it doesn't seem like they would ever have low growth.
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