Nike announces 1,400 job cuts as sales lag

Sportswear giant Nike announced Thursday it’s cutting about 1,400 jobs in its operations division, mostly tech workers.

COO Venkatesh Alagirisamy said in a note to employees that the company’s management was nearly done with its reorganization as part of a turnaround plan and that its goal was to operate with “more speed, simplicity and precision,” The New York Times reported.

Those affected began getting notices Thursday.

“This is not a new direction,” Alagirisamy told employees. “It is the next phase of the work already underway.”

The company is working to realign its tech team, modernize manufacturing for Air, move some Converse Footwear operations and integrate its materials supply chain work into footwear and apparel supply chain teams, CNBC reported.

“Collectively, these changes will result in a reduction of approximately 1,400 roles in global operations, with the majority in technology,” Alagirisamy wrote. “These reductions are very hard for the teammates directly affected and for the teams around them, too.”

The company has been in a sales slump for a while as it focused on lifestyle products and less on footwear and apparel.

CEO Elliott Hill has been working to steer Nike back to sports and create innovation, The Times reported.

The layoffs affect employees in North America, Asia and Europe, and are less than 2% of the company’s global headcount.

Last month, the company announced it expects falling sales for the rest of the year as it sees a 20% drop in China. It said rising oil prices and Middle East volatility would contribute.

Nike cut 775 jobs in January, mostly at U.S. distribution centers. Last summer, the company had another round of cuts that affected less than 1% of the workforce.

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