Job losses on the cards as Nike focuses on profits
Sports brand Nike is aiming to deliver up to $2 billion in cost savings over the next three years through simplifying product assortment, increasing automation and job losses.
Most of these savings will be invested to fuel growth, accelerate innovation and drive greater long-term profitability, it said.
The company suggested there will be restructuring charges of between $400 million and $450 million that will largely be recognised in the third quarter of fiscal year 2024, primarily associated with employee severance costs.
Matthew Friend, chief financial officer at Nike, said: “Nike’s second-quarter financial performance was a turning point in driving more profitable growth. As we look ahead to a softer second-half revenue outlook, we remain focused on strong gross margin execution and disciplined cost management.”
Second quarter 2024 revenues were $13.4 billion, up 1% on a reported basis.
CEO John Donahoe added: “We see an outstanding opportunity to drive long-term profitable growth. We are embracing a company-wide journey to invest in our areas of greatest potential, increase the pace of our innovation, and accelerate our agility and responsiveness.”