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Nike cuts hundreds of jobs

Following the collapse of the stock on Wall Street

Nike cuts hundreds of jobs Following the collapse of the stock on Wall Street

The recent results of the Beaverton-based company are not the best: despite significant sales growth in countries like China, the brand seems to have lost its appeal in Europe and the United States compared to a few years ago. The entire "Nike family" is bearing the brunt: global sales of Converse have declined by 11%, and the group predicts that fiscal year 2023 revenues will only grow by 1%, a figure significantly lower than the initially expected 3.8%. «We are witnessing more cautious consumer behavior worldwide,» stated the brand's CFO, Matt Friend, as reported by CNN. According to The Business of Fashion, the situation is also detrimental for JD Sports, whose stock fell by 5% on Friday, December 29; shares of Frasers Group, owner of Sports Direct, fell by 1%. Nike aims to find an immediate remedy for this unpleasant situation. Therefore, the company will implement a three-year cost-saving plan, aimed at changing many dynamics within the company.

The cost-saving plan, firstly, involves the cutting of hundreds of jobs, with a substantial sum of money primarily allocated for employee compensation. Among the company's other goals, aiming to save $2 billion over the next three years, are the reduction of product range and increased automation. The group has not specified which sectors will see job cuts but has stated that visitors to physical stores have increased, while online sales have yielded disappointing results. In essence, consumers are returning to malls, increasingly attracted to Swoosh-branded outlets. Nike is also trying to streamline product lines; new and innovative products are proving profitable, and it is seeking to enhance the use of automation and other technologies to improve overall efficiency.