Nike intends to lay off 700 headquarters staff during restructuring
Footwear and sportswear company Nike (NYSE: NKE) has increased the number of layoffs at its Oregon headquarters to 700 employees, reports the Associated Press. The additional layoffs were announced yesterday, November 2, and will take effect in January 2021. Among those expected to lose their jobs, there are 200 people working at the headquarters daycare, which will be closed in the coming months.
The job cuts are not directly linked to the COVID-19 pandemic, but rather are the result of a new strategic refocus on online sales and drop shipping. The move could also be seen as part of a Nike’s technology and speed of execution improvement program underway for several years now, a change requiring a leaner workforce and inexorably tending towards the reduction of jobs in the operations of the company.
E-commerce has been a strong point for Nike this year, with digital represents more than 30% of sales during the last quarter of the company. The growth of e-commerce, already sparking an economy-wide ‘retail apocalypse’ as brick-and-mortar stores face strong competition from retail websites, has accelerated during the COVID-19 pandemic. In fact, according to IBM metrics reported by TechCrunch, the coronavirus has propelled online retailing by five years into a single six-month span, resulting in levels of digital shopping that would not have been seen until around 2025 in the absence of the pandemic.
The Street reports that Nike says it is “building a flatter, more agile business and transforming Nike faster to define the market of the future” with its job-cutting plan, which it says will result in severance pay of $ 200 to $ 250 million.
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