Nike to cut 5% of global workforce

Nike, the sportswear giant, is to cut 1,750 jobs, equal to around 5 per cent of its global workforce, in an attempt to reduce costs.The job cuts represent the largest headcount reduction in the company’s history and are worse than the 4 per cent plan forecast by the group when it started its staff review in February.

Mark Parker, president and chief executive of NIke, said the decision had been both difficult and challenging as it affected colleagues, team mates and friends but that the company’s new structure would sharp its consumer focus and drive growth.

“We remain a growth company and we know these changes have created a stronger organisation that will enable us to invest in our most significant opportunities,” he said.

The group, which employees about 35,000 staff globally, said those axed, including about 500 jobs at Nike’s world headquarters in Beaverton, Oregon, will receive a robust and enhanced severance and that it expects to complete the majority of the layoffs in the coming weeks.

The cuts come as the company, famous for its “swoosh” logo, halts production at factories in China and Vietnam, trims marketing spend and reorganises its global business to cope with the downturn as sales fall and margins come under pressure.

Earlier this month, Adidas, Nike's German rival, issued a profits warning, blaming the global recession for a shock 97 per cent plunge in its quarterly pre-tax profits to just €5 million.