Nike Workers Hit by Layoffs

Investing

Published: February 16, 2024 6:51 am

Nike Inc. (NYSE: NKE) will lay off 1,600 people, part of a plan announced earlier to cut $2 billion in the next three years. Nike said a few weeks ago that automation as the athletic wear company would be used more.

Nike shares are down 17% in the past year, while the S&P 500 is up 18%. Management can take some comfort in the fact that shares of rival Under Armor are off about 17% as well. Turnarounds will be hard as the sector gets more competitive and the industry cuts prices. (Here are 29 iconic brands that completely collapsed and we forgot.)

In Nike’s most recently reported quarter, revenue was up 1% to $13.9 billion. Net income rose 19% to $1.6 billion. John Donahoe, president and chief executive, said, “This quarter showed strong execution by our team as we focus on our winning formula of innovative product, distinctive storytelling and differentiated marketplace experiences.” Since the figures did not hit expectations, his opinion did not matter.

Nike has a small army of competitors. Athletic wear has become a commodity, with the rare exception of products like the Michael Jordan line of products. Nike’s other products are up against Adidas, Reebok, Puma, Lululemon, and several China-based brands that do well in their home market.

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