Nike, the renowned American sportswear giant, has recently announced its plan to lay off 700 employees at its headquarters in Beaverton, Oregon by January 2021. This move comes as part of Nike’s larger restructuring efforts with a goal to prioritize online sales.

Initially, the company had anticipated that approximately 500 jobs would be affected at its corporate HQ. However, in a recent filing made with the Oregon Higher Education Coordinating Commission’s Office of Workforce Investments, Nike revised this figure to 700. Out of the total, 200 positions are directly associated with the permanent closure of Nike’s childcare center.

While numerous companies have been compelled to apply cost-cutting measures due to the financial repercussions of the Covid-19 pandemic, Nike has managed to maintain robust sales throughout this crisis. Consequently, the decision to lay off employees is not a direct result of the pandemic, but rather an integral part of Nike’s restructuring strategy to shift its focus towards online direct-to-consumer sales.

Since June, the company has been accelerating its efforts to implement this strategy, specifically in response to the surge in e-commerce sales brought about by the pandemic. In line with this plan, Nike had also previously announced in July that it would allocate up to $250 million towards job cuts on a global scale, under the strategic leadership of CEO John Donahoe.

As of May, Nike had a workforce of approximately 75,400 individuals, signifying a decrease of 1,600 compared to the previous year. In the first quarter of the fiscal year, ending on August 31, 2020, the company reported revenues of $10.6 billion, remaining relatively stable when compared to the same period in the preceding year. Quarterly earnings were $1.5 billion, slightly up from $1.4 billion in the corresponding period of the previous year.

Nike’s decision to lay off employees at its Oregon headquarters effectively demonstrates the company’s commitment to its strategic shift towards online sales. Despite the adverse impacts of the Covid-19 pandemic on numerous businesses, Nike has exhibited resilience in terms of sales performance. By directing its focus towards direct-to-consumer online sales, Nike is successfully adapting to the evolving retail landscape and capitalizing on the significant growth of e-commerce. Notwithstanding the layoffs, Nike remains a dominant player in the sportswear industry, and its restructuring efforts are aimed at securing the company’s long-term growth and overall success.

Useful Links:
1. Nike Official Website
2. Wall Street Journal – Nike to Lay Off About 700 at Oregon Headquarters Amid Strategic Shift