Nike announces a savings plan of 1.8 billion that includes staff cuts

Despite the fact that the net profit of 1,578 million dollars (1,438 million euros) obtained by Nike during its second fiscal quarter exceeds the figures of the previous year by 18.5%, the sports equipment multinational has announced that it will carry out an adjustment plan for the next three years.

During the presentation of the results for this period, the brand has indicated that the plan will mean savings of up to 2,000 million dollars (1,823 million euros) for the company. These measures include simplifying the variety of products, promoting automation in the company’s activity and optimizing the organization, including a workforce cut.

The firm dedicated to the manufacturing and marketing of sports equipment has explained that it foresees a decline in revenue for the rest of the fiscal year, with a “weaker outlook for the second quarter” according to Nike vice president and chief financial officer, Matthew Friend.

Reinvestment in company growth

In this sense, the company defended that the majority of these savings will be invested to drive future growth, in addition to accelerating innovation at speed and scale and driving growth in the company’s profitability in the long term.

Thus, the company reported that it is taking measures to rationalize the organization, which will generate extraordinary restructuring charges of between 400 and 450 million dollars (364 and 410 million euros) that will be largely recognized in the third quarter of fiscal year 2024, “primarily associated with employee compensation costs.”

Regarding the results of the multinational, between September and November, second fiscal quarter for Nike, net profit increased 18.5% year-on-year, up to 1,578 million dollars (1,438 million euros), while revenues totaled 13,388 million of dollars. (12,201 million euros), 0.5% more. Thus, in its first fiscal semester Nike obtained a net profit of 3,028 million dollars (2,759 million euros), 8.2% more, and a turnover of 26,327 million dollars (23,993 million euros), 1.2% more.