Nike to Cut Jobs as It Combats Sneaker Slump -- Update

By Sara Germano 

Nike Inc. is cutting more than 1,000 global jobs as part of a restructuring to help the sneaker giant battle slowing sales.

The company said Thursday that the layoffs would affect 2% of its global workforce. The Beaverton, Ore., company employed more than 70,000 around the world as of last May, including retail staff.

Nike said the changes were part of a strategy to focus on key markets, digital sales and fewer products. In recent quarters, the company has reported slowing future orders for its products in its North America market.

"We're getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever," Chief Executive Mark Parker said.

Nike was forced to slash 1,750 jobs, including 500 at its Oregon headquarters, during the 2009 recession. Since then, its global workforce has more than doubled, not including its increased reliance on contract workers, particularly at corporate headquarters. Construction is under way to expand its Beaverton campus, which currently houses more than 10,000 people.

But a shift to online shopping and the demise of traditional sporting goods chains such as Sports Authority has pinched the company and U.S. rival Under Armour Inc. Nike is also being challenged by Adidas AG, which has recaptured some of the market share it lost in past years.

In March, Nike gave a tepid outlook for sales growth this year, citing competition in the U.S. market and a more promotional retail environment. Overall, athletic footwear retail sales have fallen about 1% to $5.4 billion this year through April, according to NPD Group. Nike is expected to report its latest results on June 29.

Sales declines have hurt the lucrative basketball-shoe category, which is dominated by Nike. Nike reduced the price for LeBron James's signature shoes over several years from more than $200 a pair to between $140 and $170. The company also introduced custom kicks for Paul George and Kyrie Irving at more moderate price points, between $100-$140.

As part of its restructuring, Nike said it would reduce its geographic divisions from six to four: North America; Europe, the Middle East and Africa; Greater China; and Asia Pacific and Latin America. The company also said it would reduce its styles by 25% to focus on its biggest franchises and help speed product introductions.

Write to Sara Germano at [e-mail]

(END) Dow Jones Newswires

June 15, 2017 11:29 ET (15:29 GMT)

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