Nike recently said in a statement that the company is cutting hundreds of jobs in December 2023, just as recession fears had begun to cool down.
The wave of layoffs in 2023 has not been kind to any industry, be it technology, retail or fashion. Now, major apparel brand Nike has announced that it is planning to cut hundreds of jobs before the new year starts.
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Nike is planning to cut hundreds of jobs and increase automation of certain services in order to $2 billion in costs, reported The Guardian. The company is cutting costs across the departments due to poor sales over the last year.
In a statement, the US-based sports apparel firm said that they have taken this measure to streamline this organisation, and will be spending $450 million during the layoffs due to restructuring and for severance for the employees.
Nike has not yet seen any major uptick in sales in 2023, with the company reporting only 1 per cent hike in sales over the last three months. The profit margins of the company were up, but the company remains uncertain of its retail future as sales continue to dip.
Not only is there a lull in the rise of the sales of Nike, but the share prices of the company fell 10 percent in after hours trading. Nike is not the only sporting apparel company with a dip in share prices, with other firms such as JD Sports and Sports Direct also experiencing a fall on the stock market.
This is the second largest layoff in Nike after the company fired 700 employees in 2020 in the middle of the Covid pandemic in an effort to cut costs during the global lockdown.
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Layoffs in 2023 spark recession fear
The economic slowdown in the United States and European Union, as well as the inflation rates caused by Covid, Russia-Ukraine war and other factors have sparked a fear of recession in 2023 in western countries, leading to many companies indulging in mass layoffs.
However, Indian companies saw a 58 per cent increase in layoffs, surpassing last year’s trends. a total of 1,175 tech companies laid off 2,60,509 employees in 2023 as compared with 1,064 tech companies letting go of 1,64,969 employees in 2022, as per data from layoffs.fyi.
