Nike layoffs are worse than it originally expected

Despite Nike's sales rebounding from the early blow of the pandemic, the company is reportedly planning on laying off 700 employees in January. All of the 700 eliminated positions — 200 more than initially anticipated and reported — will be in and around Nike's headquarters in Beaverton, Oregon.

News of the layoffs was obtained by The Oregonian from a legal briefing Nike filed to state labor officials on Monday. It will include 200 employees from its company childcare facility, which will be shuttered permanently.

"We are building a flatter, nimbler company and transforming Nike faster to define the marketplace of the future," the company said in a statement, which did not confirm the number of people who will be retrenched.

Sales are up, so what gives? — Nike sales hit $1.5 billion in the last quarter, up from the $1.4 billion figure reported from the same period in 2019. The company's share price also hit an all-time high of $131 in mid-October and closed at $122.39 yesterday. All of these numbers signal a return to normalcy for Nike, which earlier in 2020 saw its first quarterly loss in more than two years because of the financial impact of COVID-19.

With business booming again, the layoffs come as part of a strategy change for Nike as the company shifts its focus to online, direct-to-consumer sales. As part of its "Consumer Direct Acceleration" strategy, Nike will spend up to $250 million on eliminating jobs worldwide. The company reported 75,400 worldwide employees at the end of May, down 1,600 from a year prior. Of those, 13,000 are employed at the Beaverton headquarters.

Oregon hit hard — Nike is the largest employee in Oregon, where the unemployment rate hit 8 percent at the end of September. Prior to the pandemic, the statewide rate was just 3.5 percent.

A prior round of layoffs included more than 100 vice presidents during the summer, as well several third-tier executives who were let go in October.