Nike slashes 1400 jobs
Nike is undergoing a major restructuring. With plans to sell more direct to consumer online, the company is cutting 1400 jobs and reducing the number of sneaker styles it offers by a quarter. The news first broke on U.S. News & World Report.
The company announced several changes to its business structure today, saying the restructuring will help it offer products to consumers faster.
Beaverton, Oregon-based Nike says the job cuts represent about 2 percent of their 70,000 workforce worldwide.
Nike will be directing its focus on 12 cities in 10 countries that are expected to represent more than 80 percent of its projected growth through 2020.
Nike announces layoffs and cost cutting measures
On the announcement of the news, shares fell to 53 dollars and 35 cents.
While cost cutting measures are practical for any business, Nike was seeing robust financial growth, so slashing jobs was a surprise.
During the third quarter of fiscal year 2017, Nike saw revenues rise 5 percent, 7 percent growth on a currency neutral basis, diluted earnings per share rise 24 percent and inventories up 7 percent.
"The power of NIKE’s diverse, global portfolio delivered another solid quarter of growth and profitability,” said Mark Parker, chairman, president and CEO, Nike, Inc after quarter three results were announced. “To expand our leadership and ignite NIKE’s next phase of growth, we’re delivering a relentless flow of innovation through performance and style, increasing speed throughout the business and creating more direct connections with consumers leveraging digital and membership.”
Whether or not these cost cutting measures will help Nike is a wait-and-see situation.