Nike Lays Off 740 Workers as Activewear Brands Struggle
The activewear space may look dreary, but the Swoosh is encouraged by increased consumer interest in health and fitness
Nike is laying off approximately 740 employees at its Beaverton, Oregon, headquarters, part of the sportswear giant’s three-year cost-cutting plan to save $2 billion following weakened sales.
The cuts will impact employees at One Bowerman Drive and surrounding neighborhoods, collectively referred to as WHQ, according to a notice penned by Michele Adams, Nike’s vice president of people solutions.
Like many other activewear companies, Nike has experienced softening consumer demand.
Last month, Adidas posted its first annual loss ($63 million) in over 30 years and projected North American sales will continue to be sluggish. Under Armour reported decreased revenue in its footwear and apparel categories in Q3 2024, while Lululemon, which has warned of slowing sales, is laying off 128 employees at its distribution center in Sumner, Washington, according to a WARN notice.
Nike’s shares have fallen over 11 percent so far in 2024.
Remote Work To Blame?
Nike, however, appears to be reflective, analyzing possible missteps as it outlines its comeback.
Nike CEO John Donahoe cited remote work for the brand’s lackluster innovation in recent years, recently telling CNBC’s Sara Eisen that Nike has been “ruthlessly focused on rebuilding” its “disruptive innovation pipeline.” He also acknowledged that Nike’s move to sell merchandise directly through its stores and website had “over-rotated away” from its wholesale partners, such as Macy’s and DSW.
“We’ve corrected that,” Donahoe told Eisen. “We’re investing heavily with our retail partners.”
Despite a subdued macro outlook, Nike chief financial officer Mike Friend told investors that the increased interest in health bodes well for the retail giant, as does the upcoming Paris Olympics.
“We think we continue to have industry tailwinds, consumer interest in sport, more people participating in running events and marathons to more people focused on fitness and living a healthy lifestyle,” Friend said on Nike’s Q3 2024 earnings call.
Nike Embraces Fitness & Wellness
By all accounts, Nike has been laying the groundwork to make a deeper push into fitness and wellness. The Swoosh hosted its first-ever Nike Well Festival in London last month, kicking off a European tour centered on movement and mindfulness with yoga, HIIT, dance fitness sessions and workshops.
The sportswear giant also launched Nike Studios, an in-person boutique fitness experience in California that will soon open in Austin. Nike also unveiled Nike Strength, a collection of strength training equipment with Nike-branded barbells, dumbbells, kettlebells and a bench.
