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Nike to lay off 740 employees by June amid cost-cutting plans following drop in revenue
According to the Nike's statement, the company has decided to lay off 740 of its employees at its Oregan, U.S headquarters. Read to know why.
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Nike has announced the layoff of 740 workers as part of a company restructuring plan
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The company reported the layoffs to Oregon’s Office of Workforce Investments
Shares of sports clothing and equipment giant Nike will be closely watched following the announcement in a notice issued on Friday that it intends to lay off 740 employees at its Beaverton, Oregon headquarters by the end of June. The sportswear brand is making this decision to save costs after seeing a decline in revenue in the first half of FY 2024–2025.
On Friday, Nike's vice president of people's solution said that the company will be permanently reducing its workforce at its World Headquarters as part of a second phase of impacts, effective June 28. Several American and Canadian companies, including Nike, have lately declared that they will be implementing layoffs to manage costs amidst an unstable market.
Nike announces layoffs amidst cost-cutting
The headcount decrease by the sportswear giant is a component of a three-year cost-cutting plan that was unveiled in December with a $2 billion reduction target. The announcement follows the company's February announcement that it will cut 1,600 positions, or around 2% of its whole workforce, due to declining demand for its sneakers and shoes.
The company at the time also proposed management reorganization and changes to product supply as cost-cutting initiatives. During its most recent results call in March, the company issued a warning, stating that it expects revenue to decrease by low single digits in the first half of its fiscal year 2025.
Since the year began, analysts have been pessimistic about the sports gear giant, citing worries about slowed innovation, a backlog of inventory, and growing competition in the activewear industry. As a result, Nike's stock has dropped 13% while the S&P 500 has increased by 4%.
The Nike stock price looks to be forming a double bottom pattern, with a floor of support possibly established at $89 by the swing lows in April and September. Investors should keep an eye out for purchasers during times of weakness. As the market continues to rise, it's important to monitor the $104 mark, which is close to a crucial horizontal line that connects a range of price movements over the last ten months and could see selling pressure. If this region is broken above, a test of greater resistance might occur.
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