Nike to cut 2 percent of workforce
Nike, the worldwide creator of sports apparel with headquarters near Beaverton, announced on Thursday that a corporate restructuring could result in an estimated 1,400 layoffs worldwide, which accounts for about 2 percent of its workforce.
The Portland Business Journal first reported the story.
Nike officials said the layoffs are a result of the newly introduced "consumer direct offense," which is a company alignment that allows Nike to better serve the consumer personally, at scale, according to Business Wire. Leveraging the power of digital, Nike will drive growth — by accelerating innovation and product creation, moving closer to the consumer through key cities.
"The future of sport will be decided by the company that obsesses the needs of the evolving consumer," said Mark Parker, Nike Chairman, President, and CEO. "Through the consumer direct offense, we're getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever."
Nike has 70,700 employees worldwide, including retail and part-time. Nike also plans to reduce the number of product lines by 25 percent and introduce more selections for the remaining lines,
It is unknown how many layoffs would happen locally.
Beaverton Mayor Denny Doyle said he heard the news Thursday, June 15. He said the news likely will have a, "big impact," on the economic vitality of the region. But how big remains a mystery.
"We are expecting anything from 'no one' to 'who knows?'" Doyle said. "It might not affect us locally."
But if it does, he said, the city will help. "We're going to do what we can to help them help the workers who are laid off," Doyle said.
He added that corporate restructuring is the norm, rather than a surprise, for major international businesses like Nike and Intel — the second and first largest private employers in Washington County, respectively.
Cornelius City Manager and former Beaverton Mayor Rob Drake mirrored Doyle's sentiments. "I did read about it and it looks like Nike is being more competitive to remain strong." Drake said. "Nike is a great employer here in the county and we appreciate their presence," he added, "Their management is outstanding. It looks like they are recognizing changes in the market and trying to adjust to survive and compete. I feel badly for those being laid off, but I understand what Nike has done and why."
Beaverton Chamber of Commerce President and CEO Lorraine Clarno said Thursday, "As companies innovate and grow they also have periods of restructuring. We do not know any specifics about local layoffs, however, we are fortunate that this is happening during a period of historic low unemployment and are confident that these highly talented folks will be re-employed in short order throughout our region. Nike's expansion continues which indicates more great things are to come," She added "The Beaverton Chamber is here to assist our Partner, Nike, and any of their employees that are affected during this transition."
Nike has grown its presence in Washington County since the turn of the century. Between 2007 and 2013, Nike's employment in Oregon grew by nearly 60 percent. More than 8,000 Nike employees and contract workers were employed at its headquarters in 2013. Today that number is closer to 12,000.
Trevor Edwards, President of the Nike brand, will drive the consumer direct offense through integrated category, geography, marketplace, product, merchandising, digital, and direct-to-consumer teams.
In the new alignment, the company will drive growth by serving consumers in 12 key cities, across 10 key countries: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan. These key cities and countries are expected to represent more than 80 percent of Nike's projected growth through 2020.
The news of the layoffs comes as Washington County reports the lowest unemployment rate in decades, down to 3.1 percent across the county and lower than that in some communities. Economists often refer to 3 percent unemployment as "full employment."
A Nike employee who works in manufacturing near Beaverton, said the first she heard about the layoffs was on the news. She declined to be identified, but said she doesn't think it will impact her position.