Nike increases layoffs at headquarters to 700 #SmallBiz - The Entrepreneurial Way with A.I.


Wednesday, November 4, 2020

Nike increases layoffs at headquarters to 700 #SmallBiz

Dive Brief:

  • Nike on Thursday filed an updated WARN notice in Oregon detailing that approximately 700 employees will be impacted by the planned layoffs at its Beaverton headquarters by Jan. 8.

  • When the retailer initially filed its WARN notice in July, Nike had planned for "at least" 500 layoffs, including members of its corporate leadership team and employees at its childcare centers.

  • The layoffs are tied to Nike's Consumer Direct strategy, which prioritizes Nike's direct-to-consumer channels while paring down wholesale. The plan has led to some reorganization in the company's top leadership in addition to the layoffs.

Dive Insight:

In disclosing the additional job cuts, Nike did not provide any other details about the layoffs or whether they have been completed. Executives were vague about the layoffs when they were first announced as well, initially saying that there would be a "net loss of jobs" and then later specifying that the layoffs were expected to generate up to $250 million in termination costs.

What the company has been clear about all along is that the layoffs are tied to the latest phase of its strategy, which includes three pillars: a "marketplace of the future" focused on a seamless experience everywhere Nike is sold, a simplified approach to product categories and more investment in digital. 

As part of the strategy, Nike is focused on leading with its direct-to-consumer channels and partnering with a select number of wholesalers that help amplify the brand. Under Armour announced a similar initiative in its earnings report Friday. While in Nike's case the execution of the plan has led to layoffs, the company has been clear that the job cuts are not connected to any revenue losses as a result of the pandemic, but rather to the reorganization of the leadership team and the streamlining of some of its processes.

The company promoted several execs in July to new roles as a result, including naming three key roles to oversee product categories: vice president and general manager of men's, vice president and general manager of women's, and vice president and general manager of kids.

"The leadership changes, combined with a strategic alignment of NIKE's operating model against the CDA, will create even greater focus and agility that will be enabled by a nimbler, flatter organization in service of consumers," the press release at the time read. "To drive this focus, NIKE will streamline its organization, including its Corporate Leadership Team (CLT)."

via by Cara Salpini, Khareem Sudlow