Despite Nike's sales rebounding from the early blow of the pandemic, the company is reportedly planning on laying off 700 employees in January. All of the 700 eliminated positions — 200 more than initially anticipated and reported — will be in and around Nike's headquarters in Beaverton, Oregon.
News of the layoffs was obtained by The Oregonian from a legal briefing Nike filed to state labor officials on Monday. It will include 200 employees from its company childcare facility, which will be shuttered permanently.
"We are building a flatter, nimbler company and transforming Nike faster to define the marketplace of the future," the company said in a statement, which did not confirm the number of people who will be retrenched.
Sales are up, so what gives? — Nike sales hit $1.5 billion in the last quarter, up from the $1.4 billion figure reported from the same period in 2019. The company's share price also hit an all-time high of $131 in mid-October and closed at $122.39 yesterday. All of these numbers signal a return to normalcy for Nike, which earlier in 2020 saw its first quarterly loss in more than two years because of the financial impact of COVID-19.
With business booming again, the layoffs come as part of a strategy change for Nike as the company shifts its focus to online, direct-to-consumer sales. As part of its "Consumer Direct Acceleration" strategy, Nike will spend up to $250 million on eliminating jobs worldwide. The company reported 75,400 worldwide employees at the end of May, down 1,600 from a year prior. Of those, 13,000 are employed at the Beaverton headquarters.
Oregon hit hard — Nike is the largest employee in Oregon, where the unemployment rate hit 8 percent at the end of September. Prior to the pandemic, the statewide rate was just 3.5 percent.
A prior round of layoffs included more than 100 vice presidents during the summer, as well several third-tier executives who were let go in October.