Written by: Bella Dettlaff
Nike cuts 2% of workforce to improve operations
The American and worldwide corporation that produces and creates the design, development, manufacturing, and worldwide marketing and sales of certain footwear, athletic apparel, equipment and accessories has just recently announced a new form of business structure they are committing to. Nike will be changing many things to their business but among those changes includes the trimming of 2 percent of its workforce globally. At the end of fiscal 2016, Nike had about 70,000 employees. This means that due to the organizational changes, about 1,400 employees are expected to lose their jobs. The demand for a large workforce is not high as Nike is looking to revamp its operations. There’s an opportunity cost to releasing their experienced workforce but Nike is willing to do anything to update their business structure. The new business structure and the cutting of employees will supply more wanted products to customers more efficiently and faster because they are focusing on the “Consumer Direct Offense” which is formulated to be a faster service to fulfill shoppers with customization options.
Due to sportswear having a large competitive market, Nike is looking to change its way of business. There were many signs that the competitors, mainly Adidas and Under Armour were improving and advancing through their products more than Nike currently was. Adidas is showing revival, advancing in popularity along with the Under Armour having a new expansion into new athletic-gear categories. The image above shows that Nike’s growth rate has slowed down in recent years which is one of the main reasons why they are announcing the improved operations to this favored brand so that it’ll keep its
According to USA today, “In the coming months there will be a big push toward mass customization, new products and more interesting digital experiences within the business,” Trevor Edwards, president of the Nike brand unit explains. For example, Nike's new Express Lane, which attains products from what the response is from consumers demand will launch in China. This will increase the economic growth and hopefully keep increase Nike’s popularity. The well-known brand, Nike is looking to get their products the customers in the most optimal way. According to a video on bloomberg.org, the Sam Poser, an analyst of research says, “This new structure aligns all of our teams toward our ultimate goal -- to deliver innovation, at speed, through more direct connections.” Showing that the demand to supply ratio will be constant and more customers will be wanting their products.
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Thomas, Lauren. “Nike to Cut about 2% of Its Global Workforce, Announces New Business Structure.” CNBC, CNBC, 2017, www.cnbc.com/2017/06/15/nike-to-cut-approximately-2-percent-of-its-global-workforce.html.Turner, Nick. “Nike Cutting About 2% of Workforce as It Revamps Operations.” Bloomberg.com, Bloomberg, 2017, www.bloomberg.com/news/articles/2017-06-15/nike-cutting-about-2-of-workforce-as-it-revamps-operations.