Nike announced Thursday that it would trim its global workforce by 2 percent or 1,400 positions because of restructuring processes caused by competition from Under Armor and Adidas.
Nike’s CEO noted that a successful company could decide the future of sport of it obsessed the needs of evolving customers. In 2016, Nike’s workforce included 70,000 people. The new cuts would affect 1,400 employees.
In 2016, Nike’s sales hit $32.4 billion, and increase from 2015’s $30.6 billion. The net profit was $3.8 billion. The sportswear giant announced that it is working on revamping its headquarters campus.
Despite, above average performance, Nike lost customers to Under Armor and Adidas. Nike also announced that it would focus on a dozen of cities which should account for 80 percent of its growth over the next years. These cities include London, Los, Angeles, Mexico City, New York, Seoul, Tokyo and Milan. The new plan will be coordinated by the company’s president Trevor Edwards.
The Company’s Goals
The company added that it would shrink operations from six global areas to four: Middle East, Asia, Europe, and North America. Edwards told reporters that in a fast changing world, the company needs to serve athletes more personally and faster.
He added that Nike will remain committed to work toward achieving its ultimate goal which is to deliver innovatory products in a timely manner through direct connections.
In the wake of the announcement, share prices slipped 2.3 percent to $53.43. The highest price recorded in 2016 was $60.33, and the lowest $49.01.
It is worth noting that in 2015, the athletic apparel maker promised to boost global sales to $50 billion by 2020. The company told investors at the time that the goal is achievable through a larger international interest in its products.
The promise was made by Chief Executive Mark Parker who said that the company could hit the target if it had a 10% annual growth.
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