About 700 employees at Nike’s world headquarters in Beaverton, Ore., Will be laid off under “permanent workforce cuts” on Jan. 8, 2021, according to a WARN update. update was issued to the Oregon Higher Education Coordination Commission’s Labor Force Investment Office on Monday.
NIKE STRATEGY DIGITAL LONG-INDEPENDENT SALES
Kristen Lupo, Nike’s vice president of Total Rewards, said in a statement that collision rights will not be available to affected employees and that those not represented by a labor organization will be notified directly. continued.
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The move, which was originally announced in August, previously estimated at least 500 employees would be laid off, resulting in shutdown costs around $ 200 to $ 250 million.
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Employee layoffs are being made in response to the ongoing impact of the coronavirus pandemic on Nike’s business. During the fourth fiscal quarter ending May 31, Nike reported an unexpected loss. Its revenue dropped 38% after digital sales failed to recoup losses in closed physical stores to combat the spread of the virus.
Lately, however, the sportswear maker appears to be making a comeback. It posted solid quarterly profits thanks to soaring online sales of sneakers and workout apparel. Nike reported net profit of $ 1.5 billion in first-quarter profits, or 95 cents per share, for the three-month period ending August 31, up 11 percent from the same period in 2019. .
The company’s digital sales increased 82%, helping to offset the drop in the company’s wholesale business and stores. Meanwhile, revenue for the quarter remained stable at $ 10.6 billion, down 1% year-on-year.
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Nike is not the only company to cut jobs due to the pandemic, with oil giant ExxonMobil announcing a similar move to cut around 1,900 jobs and aircraft maker Boeing announcing it would reduce its workforce. to approximately 130,000 employees by the end of 2021 compared with currently approximately 145,000 employees.
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