Nike plans job cuts as sales forecast points to further decline
NEW YORK: Nike plans to cut an undetermined number of jobs and establish a new campus in India as it seeks to accelerate a turnaround following another downcast quarter.
Nike, the sports apparel giant, plans to reduce its workforce and establish a new office in India as part of its efforts to revive performance following a weak earnings quarter. The company announced a possible job reduction and a new campus in Bengaluru, India, as it seeks to bolster its position in the global market.
In its latest earnings report, Nike revealed a two percent decline in quarterly profits, reaching $712 million, while revenues dropped by four percent to $11.2 billion. The company anticipates a further decrease in sales for the current fiscal year, projecting a decline in the high-single digits.
Nike's CEO, Elliot Hill, emphasized the company's commitment to long-term growth and transformation during a conference call. Hill highlighted the need for improvement in sportswear and the Jordan brand, and expressed optimism about the company's growing partnership with women's basketball star Caitlin Clark.
The sports brand faced a significant sales drop in Greater China, with revenues falling 22 percent to $1.2 billion. Additionally, Nike experienced declines in all other regions except North America, where revenues increased by two percent.
Hill acknowledged that the company must make changes to become more agile, efficient, and athlete-focused. He promised transparency as the company moves forward with its restructuring plans, which are expected to begin in the new year. Shares of Nike fell by 7.1 percent in after-hours trading following the announcement.
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