‘Woke’ Business Challenges Force Nike to Layoff 2% of Its Global Workforce

By: Julia Mehalko | Published: Mar 27, 2024

Nike has announced it will lay off 2% of its global workforce, which equals about 1,500 employees. This latest announcement comes as the sportswear giant undergoes a new $2 billion cost-cutting plan.

Nike’s layoff news also comes amid changing consumer habits when it comes to buying sportswear items, as well as higher-end goods. Critics of the company also can’t help but point out their struggles over their “woke” business moves.

A Change in Performance

In announcing this news, Nike CEO John Donahoe expressed his regret over the layoffs. He took full responsibility for this move while stating that he and his leadership team were not performing the best way they could.

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A white Nike logo on a gray surface.

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“This is a painful reality and not one that I take lightly,” Donahoe said. “We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.”

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Changing Strategies

For those keeping an eye on Nike’s business moves, this layoff announcement may not come as a surprise. Back in December, the sportswear company revealed it would undergo a $2 billion cost-cutting strategy.

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A man standing outside a Nike store.

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This strategy would be all about restructuring the entire company in an effort to cut costs. Back when this new plan was announced, many analysts assumed layoffs would eventually be revealed. 

A Positive Spin

Though Donahoe clearly stated he was disappointed these layoffs had to occur, he also tried to be positive about the future of Nike.

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A person carrying black and white Nike shoes in their hand.

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In a statement, Donahoe expressed his desire to see this moment as a challenge he and the entire Nike workforce can overcome. “Nike has a proud history where the most challenging moments bring out the best in us, individually and as a team,” he said.

Former Nike Employees Strive to Help

Many former Nike employees have already jumped up to help those who have been — or will be — laid off. These employees have stated that many former Nike workers have gone on to great things, including running their own companies.

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An urban Nike store in a city seen in the evening.

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As a result, groups have been made of former employees of the sportswear company. These workers help each other find new jobs, often within their own companies.

Transitioning From Nike

Jana Panfilio worked at Nike for 29 years. Now, she’s helping other employees find a new job after being laid off.

Tennis players on a court by tennis balls wearing Nike shoes.

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“We are here to support as a landing place for those people as they leave the brand to make their transition from Nike to next,” she explained. “There is a disproportionate number of former Nike people that start their own companies. They are looking for talent, and they are looking for clients.”

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Regular Stores Won’t Be Affected

The company did reveal that these layoffs won’t in any way impact any Nike stores or distribution centers. Instead, many of the layoffs will occur on the corporate side of the company, such as at their Oregon headquarters.

Many rows of Nike shoes on the wall of a store.

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Therefore, store and distribution center workers will in no way be laid off during this restructuring process.

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A Different Industry

Nike’s restructuring plan comes as the entire sportswear industry undergoes many changes. The industry is much different today than it was only a few decades ago.

A red and white Nike shoe against a red background.

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Though Nike remains the leader in the sneaker market globally, new competitors have risen within the industry. This has forced the giant to reconsider many of its previous, traditional moves as it seeks to adapt to the changing times.

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Inflation Worries

Inflation has risen once again, signaling that many American consumers will likely continue to keep an eye on what they spend their money on. Even though last year saw signs that inflation was cooling, this trend didn’t last.

A person wearing all-white Nike shoes with white socks and blue jeans.

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Now, many shoppers are choosing the spend money on essential items they need, as prices remain high. Splurging on Nike items, therefore, hasn’t become a great need during this time.

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Criticism of a “Woke” Nike

In 2023, some openly criticized Nike for adopting a new “woke” business strategy. Much of this backlash occurred after the company partnered with Dylvan Mulvaney, a transgender TikTok personality.

A close-up of a dark, black building that has a large red Nike logo on it.

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Caitlyn Jenner was one public critic of this partnership. Jenner called out the company and accused them of going “woke.”

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Nike’s Progressive Policies

Though Nike most recently faced conservative backlash for partnering up with Mulvaney, the company is no stranger to backing what could be considered liberal — or progressive — ideas. In 2018, the corporation renewed its deal with Colin Kaepernick.

Many illustrations lit up alongside Nike’s Just Do It slogan.

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Kaepernick’s renewed endorsement deal met some backlash, as critics thought that he shouldn’t be the face of a “Just Do It” advertisement campaign.

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A New Restructured Nike

Previously, Nike never faced any monetary backlash from their campaigns, even though conservative critics publicly called them out. Now, as a result of these layoffs, some are stating they’re losing money because of their woke policies.

A wall with many Nike logos on it, as well as their Just Did It hashtag trend.

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However, other analysts disagree. Sports industry analyst Matt Powell previously spoke about Nike’s successful campaigns. “Pretty much every metric you can look at was positive for Nike,” he said. “They are clearly aligned with their core customer base.”

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