Thread regarding Nike Inc. layoffs

@2nd why the snarky response?

@2iuj, your director brother was not given any information that the rest of us did not know. Everyone knows that the first and second weeks of September is the timeframe by which the next round of layoffs will happen and again in October.

My brother is a director and he was told that the next round of layoffs is in two weeks. The fact that someone gave him this information shows how corrupt Nike really is.

The rumor hive is buzzing... More leadership layoffs in the next week or so. Then the cuts will continue for lower levels through end of September and maybe if you are unlucky, early October.

Truth is your boss may not know, if they do, maybe you've noticed them acting odd. Canceling meetings with you? Not assigning you work? Might be signs of a layoff, or maybe it's just incompetence. Who knows at this point.

If you are worried, don't spend your bonus, work on your resume, get a personal cell phone and get all your personal items off your computer.

@itib $100k is the average termination cost. VPs and Sr. Directors will get far more than this amount. Directors will likely receive roughly this amount. Again, it's an average. There will not be 5000 jobs eliminated. That is a 20% RIF...not happening.

@1zzi: With all due respect, your assessment is incorrect. According to your math, if 2500 people get laid off, divide that into the $250M one-time expense, the ave severance package would be $100K per person. That exceeds the annual salary of many non exempt employees. We’re looking at least 5000 layoffs. ThIs brings the ave severance payout to $50K which is more realistic. The post by @gxx
is spot on.

Come on, people. $200M - $250M one-time cost to Nike. That's about 2,000 - 2,500 people. All corporate jobs, which is roughly 25,000 people globally. That's a 10% RIF to the corporate structure. 2/3 of those cuts will come from WHQ with about 300 jobs already eliminated. That means about 1,400 more cuts to make at WHQ and another 800 or so for NA territory offices and in the geo offices. Hopefully they get this done sooner than later so that everyone can get on with their lives.

The Oregonian picked-up the story of as many as 7,500 lay-offs globally:

https://www.oregonlive.com/business/2020/08/nike-could-lay-off-10-of-staff-stock-analyst.html

Or the $100’s in gift baskets being distributed... apparently some groups budgets aren’t as austere as others.. Those groups must produce massive $ in revenue

It can’t be all bad... there are still groups holding ‘off sights’ when they have any number of Nike buildings available to socially distance...

Endless meetings of 'leaders' telling us the same thing over and over.

It's like telling your significant other you're going to possibly divorce them but
you want to think about it for 5 months. Don't stress though. It'll be ok.

'We know as much as you. That's all we can say right now'
'Trust we will fire people with a level of humanity'
'We will lay people off with precision and integrity but it is not based on your work or CFE ratings'
'Just keep your head down and keep working'
'Take PTO when you need it, but not in September because we will be too busy'

etc etc etc.

I've heard that it's this week. Though JD's all hands would indicate the possibility of next week or the week of his all hands (since it's randomly on a Thursday and not a Monday).

My guess is 1000 gone from WHQ end/August plus 1500 more end/Sept. Devious d-bags won't disclose final RIF numbers until after shareholder meeting to try to minimize the stink. Torture for real OP.

@ruz: You aren’t tracking on the math.

Poser did not say, “My sources tell me Nike intends to lay-off 7-10% of the approximately 25,000 employees who are subject to lay-off.”

Poser DID say, “My sources tell me Nike intends to lay-off 7-10% of its global work force [which is approximately 75,000 employees.]

That puts the lay-off number, according to Poser, at between 5,000 to 7,500.

And we know from JD that about 2/3’s of the workforce is not subject to lay-off in the first place. So you have to apply those layoff percentages and numbers to the people who are actually subject to lay-off. THAT number is about 25,000.

So that 7-10% figure (5,000 to 7,500 people) cited by Poser would in reality not be applied to 75,000 people, but only to the 25,000 who are subject to being laid-off. This is how @xpp arrived at the ‘1 out of every 5’ figure for corporate employees. For what it’s worth that math seems correct.

While that 5,000 - 7,500 number seems high to me too, the breakdown from the $200M - $250M severance payments if you assume an average $50,000 severance package still gets you to 5,000 employees. And here too that 5,000 number needs to be applied only to the approximately 25,000 employees subject to lay-off. Not the remaining 50,000 or so who we already know aren’t being laid off.

With both calculations you still arrive at 1 out of every 5 corporate (non-retail, non-distribution, non-Air Mi) employees.

Or to sum it all up: Based on Poser’s comments today AND what we already know Nike is planning on spending for termination costs there’s good reason to believe that somewhere close to 5,000 employees will be impacted. Keep in mind this is across Nike’s 30+ global offices. I don’t think anyone here knows how many layoffs will be at WHQ, EHQ, or any of the other dozens of offices. I would be surprised if the number in Beaverton is less than 1,500 - 2,000.

@ruz, depends on the base of 10% you are talking. If the board looks at 70,000 number and say let's cut 10%, they are thinking 7,000, and since DC, store, and AirMi is excluded, we will have 7,000 office employee gone. Let's hope that's not the case, and, brace for impact.

10% of 25,000 is 2,500 not 5,000.

1 out of every 5 people laid off would be 20% layoff.

I think your math is off a little.

Let’s do some math.

Nike has about 76,000 employees. I’ll call it 75,000 for easier number crunching.

Roughly 2/3’s of that number work in the groups excluded from layoffs. Mostly retail which makes up about 60% of the global workforce.

So that’s about 25,000 people subject to lay-off. Poser said his sources are telling him that 7% to 10% of the global workforce will be let go which is about 5,000 to 7,500 people.

From this we can extrapolate that the best case scenario here is that 1 out of every 5 corporate employees will be let go. That is a more significant impact than I had imagined.

But keep in mind that these numbers are all rumors from available information of unknown credibility. We have no idea from where Poser got his 7-10% figure and whether or not it’s accurate. The actual number could easily be half that.

Based on the announced termination spend of $200M to $250M I had previously guessed we’d be looking at 4,000+ layoffs. That number is roughly consistent with what Poser is claiming today.

Needless to say this is a very large impact. Nike could dispel rumors and innuendo by being straightforward on the next all-employee call. I would prefer to hear depressing but accurate information as opposed to vague pronouncements that only serve to flame the rumor mill.

I read the same article by Sam Poser. Just note that JD stated that layoffs won’t impact store athletes, or teammates in distribution centers/ Air Mi facilities. Does anyone know the headcount if you deduct these positions?

I don’t know timing. But I do know that today Susquehanna analyst S. Poser said his checks are telling him Nike is targeting a “7% to 10%” reduction in headcount. That’s a lot of people. And it worries me because Poser is consistently the most accurate Wall Street analyst covering Nike. He seems to have reliable sources within Nike.

I really hope it is happening soon. The stress of not knowing is getting to a lot of people.

Next round is probably happening this week and next leading up to the all hands.