Nike to lay off more than 1,600 employees

The Swoosh will be making dramatic changes to its staffing.

According to multiple media reports, Nike, the world's most famed apparel maker, will lay off more than 1,600 employees - approximately 2% of its global workforce. According to Reuters, the company is reducing its staff in light of changing consumer habits and lower demand for its products:

"Higher rental and interest rates have led customers to cut back spending on high-priced goods, resulting in sportswear companies such as Nike and Adidas, opens new tab warning that retailers are lowering their orders through wholesale channels."

The Wall Street Journal, which initially reported the plan on Thursday night, wrote according to Nike CEO John Donahoe, the company will focus more of its resources on women's apparel, running and the Jordan brand. In the company-wide memo, Donahoe claimed that "we are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.”

Nike currently employs 83,700 people worldwide and the designated cuts will bring that total to just above 82,000. The layoffs are expected to start on Friday and will be completed by the end of the first quarter of 2024 (March 31). However, retail store and distribution center employees will not be impacted.

Nike may still be the leader in athletic and lifestyle apparel yet there has never been more competition in the space, especially as consumers remain cost-conscious with stubborn inflation rates and stagnant wages. As an endorser, it has also faced growing challenges in some sports it has ruled with an iron fist, from shuttering its golf division which led to the end of its relationship with Tiger Woods to more basketball stars eschewing the iconic company for newer entrants.

The challenges aren't exactly pushing Nike off its perch atop the apparel world, yet it's the latest company to trim staff at the start of 2024. Media companies such as Paramount are embarking in mass layoffs (with terrible timing for its announcement of cuts), tech firms have been slashing budgets since the end of 2022, and retailers are also feeling the crunch.