Nike to lay off about 1% of corporate staff

Nike is planning another round of layoffs as part of CEO Elliott Hill’s efforts to realign the business and get it back to growth, CNBC has learned. 

The cuts will impact less than 1% of Nike’s corporate staff. It’s unclear how many jobs will be impacted. Nike’s EMEA and Converse businesses will not be impacted. 

“As we shared in Q4 earnings, NIKE, Inc. is in the midst of a realignment. The moves we’re making are about setting ourselves up to win and create the next great chapter for NIKE,” the company told CNBC in a statement. “This new formation is built to put sport and sport culture back at the center, to connect more deeply with the athlete and the consumer, and to give us the space to create what only NIKE can.”

Last February, Nike announced plans to lay off 2% of its staff, or more than 1,500 jobs, as part of a broader restructuring. The latest round of layoffs is part of Hill’s efforts to change how teams are structured within the corporation. 

Under former CEO John Donahoe, Nike changed the way its business was segmented. Instead of being divided by sport, it was divided into women’s, men’s and kid’s as part of a broader effort to grow its lifestyle business. 

Some critics say that adjustment was among the reasons that Nike’s innovation pipeline fell apart as the company focused on lifestyle products geared to a wide range of consumers, instead of being directed at athletes. 

Hill, a longtime Nike veteran, is now undoing that work so the business is squarely focused on sports and culture. After Hill shared his vision in June, leaders were identified in July to head the new teams, the company said, adding a “small number” of staff will depart as a result of the shifts.

In a memo to staff, Nike said as part of the changes, some staff will take on a new position or level, report to a new manager or join a new team.

Staff will learn if they’re impacted during conversations by Sept. 8. The majority of the new roles will take effect on Sept. 21.

“To make space for these conversations, corporate employees based in an office location in the U.S. and Canada will work remotely next week, unless otherwise informed by your leader,” the memo said.

Since taking the helm of the world’s largest sportswear brand, Hill has been on a mission to reverse an ongoing decline in sales, reignite innovation and win back wholesale partners. 

When announcing fiscal fourth-quarter earnings in June, Nike said it expects its sales and profit declines to moderate in the quarters ahead, indicating the worst is now behind it and the fruits of its turnaround could come sooner than expected. In a call with analysts at the time, Hill hinted at the realignment that’s now starting to materialize. 

“Instead of a men’s, women’s and kids construct, Nike, Jordan, and Converse teams will now come to work every day with a mission to create the most innovative and coveted product, footwear, apparel and accessories for the specific athletes they serve,” said Hill.

Hill said the company would organize into “sport-obsessed teams” which would “drive a relentless flow of innovative product across all three of the brands.”