Nike, a major sports apparel brand, is set to reduce its workforce by hundreds of jobs as part of a cost-cutting move aimed at saving around $2 billion. The company intends to automate certain services to trim expenses after facing disappointing sales figures in the past year.
This decision comes as Nike aims to streamline its operations, stating that it will incur approximately $450 million in expenses for restructuring and employee severance. Despite a slight 1% increase in sales over the last three months, the company remains concerned about its retail prospects amid persistently declining sales.
Although Nike’s profit margins have risen, the company witnessed a notable decline in its share prices, dropping by 10% in after-hours trading. Similar dips in share prices have been observed in other sports apparel firms like JD Sports and Sports Direct, indicating wider market challenges within the industry. This recent announcement marks the second significant layoff at Nike, following the dismissal of 700 employees in 2020 during the COVID-19 pandemic as part of cost-saving measures during the global lockdown.
