Nike CEO John Donahoe told employees in an email late Thursday that the company will lay off 2% of its workforce, a figure that suggests the company could eliminate more than 1,500 jobs.
The sportswear giant had 83,700 employees as of May 31. The layoffs will not impact the company’s stores, distribution centers, or U.S. manufacturing facilities where it makes the Air insoles that go in shoes, according to Donahoe’s email. That means the layoffs could have an outsized impact at the company’s roughly 400-acre headquarters campus near Beaverton, where it employed 11,400 last spring.
Layoffs will begin Friday morning and continue through next week. Nike’s fiscal quarter ends Feb. 29. The company expects additional layoffs next quarter, which ends May 31.
“This is a painful reality and not one that I take lightly,” Donahoe said in the email. “We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.”
Willamette Week first reported the contents of Donahoe’s email.
Nike did not immediately return messages seeking comment, but it provided a statement to Footwear News.
“Nike’s always at our best when we’re on the offense. The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities as interest in sport, health and wellness have never been stronger,” the company said. “While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”
In December, Nike said it wanted to cut $2 billion in costs over the next three years as it works to regain lost momentum. As part of the announcement, the company said it would incur as much as $450 million in restructuring charges in the quarter that ends Feb. 29, mostly from severance costs.
In his email Thursday, Donahoe said Nike would be “as supportive as possible” and the company will give laid-off employees a “comprehensive package” that includes financial, health and outplacement support.
Nike has been in a slump. In December, it forecast sales in the fiscal year that ends May 31 will only increase around 1%. It’s been losing market share to smaller, nimbler brands, including Hoka and On.
The Oregonian/OregonLive in December reported on ongoing layoffs at the company in divisions that included human resources, recruitment, sourcing, brand, engineering, digital products and innovation.
Nike has made other changes to find its footing. In November, it announced new heads of innovation, design, marketing and technology. That announcement followed a May executive shuffle designed to help the company develop the next “breakthrough innovation.”
In December, Donahoe said the cost-cutting will enable the company to invest in growing areas of the company, such as products for women, the Jordan brand and running gear.
Donahoe reiterated those priorities in his Thursday email.
“This is how we will reignite our growth,” Donahoe wrote.
In 2020, the company laid off 700 workers in Oregon as part of a restructuring designed to make the company more nimble. In 2017, Nike eliminated 745 jobs here.
– Matthew Kish covers business, including the sportswear and banking industries. Reach him at 503-221-4386, mkish@oregonian.com or @matthewkish.
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