Two months after announcing 255 layoffs in its home office in Portland, Ore., Nike Inc. is axing 490 more. The latest round of cuts completes plans to reduce the global workforce by 2 percent.
With 74,000 employees worldwide and $32.4 billion in annual sales, Nike is dealing with the ailing retail climate, an increasingly automated job market and ath-leisure overload. A Nike spokesman said Wednesday that the “organizational alignment” was to support its Consumer Direct Offense, a companywide initiative that was mapped out in June. As for why the latest round of job cuts were needed, the spokesman said, “We are prioritizing our greatest opportunities and putting decision-making closer to the consumer so we can move at the speed of the marketplace. To accomplish these goals, we made strategic decisions to invest in areas and capabilities to amplify our growth opportunities and to make reductions in other parts of the business.”
As for further cuts in other offices, the spokesman said Wednesday, “This month many of our global teams aligned to the Consumer Direct Offense, yet some parts of the organization will complete their transition in the coming weeks and months.”
The company declined to comment as to whether its advertising and marketing budgets will be streamlined for further savings. Nor would the spokesman discuss how the vacated space on its sprawling Beaverton campus will be used or if it will be renovated. Under Armour, which moved about 100 employees into new offices in Portland in May, is said to be poaching design and executive talent from local rivals Nike, Adidas and Columbia Sportswear.
Headed by Nike Brand president Trevor Edwards, the Consumer Direct Offense focuses on 12 key markets — New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan. If all goes according to plan, these cities are expected to represent more than 80 percent of Nike’s projected growth through 2020.
Along with Intel, which recently announced its own layoffs, Nike remains one of Oregon’s leading employers. But the 63-year-old footwear giant is dealing with an oversaturated athletic market that has only been compounded by the swarm of ath-leisure labels encroaching on an already crowded field. The most recent round of job cuts follow this summer’s announcement of an estimated $1 billion expansion plan at the 300-acre Beaverton campus.
Having nearly doubled its workforce in Portland to 1,700-plus people, Adidas fielded an unprecedented 330,000 applications in the first half of this year for positions in North America, a company spokeswoman said Wednesday. The group is expanding its North American headquarters and is building “a world class collaboration space” that will connect two existing buildings in Portland. To encourage more communal thinking, a Maker Lab was recently added to the center of campus and updated furniture and more open-work spaces are being added. During the renovations, Adidas will relocate about 250 staffers to an 80,000-square-foot leased space in Portland’s Montgomery Park project.
With Adidas second-quarter brand sales up 33 percent in North America, the company is in the midst of its largest investment in North America, according to the spokeswoman. Last month it announced a Major League Soccer partnership, and one with USA Volleyball was revealed in July. The company also has new deals with Arizona State University, the University of Louisville, the University of Nebraska and Georgia Tech.
Some of those additions will be former Reebok employees — about 150 were offered jobs in Oregon as part of a restructuring that was announced earlier this year. Adidas-Salomon AG acquired Reebok International Ltd. for about $3.8 billion in 2005. Next month, Reebok will be picking up stakes from a 60-acre Canton, Mass. campus for new offices in the Innovation & Design Building in Boston. Reebok’s 220,000-square-foot space was being built for 650 to 700 employees — about 300 fewer than its previous team.