Clothing brand Nike (NKE) is planning another round of layoffs as CEO Elliott Hill pushes to reorganize the company and return it to growth, according to CNBC. Indeed, the upcoming cuts will affect fewer than 1% of Nike’s corporate workforce, although the exact number of jobs to be cut is unclear. Nike also confirmed that its Europe, Middle East, and Africa region, as well as its Converse brand, will not be affected.
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In a statement, Nike said that these changes are part of a larger plan to refocus the company on sport and athletic culture in order to connect better with athletes and consumers. This move follows a February announcement where Nike said it would cut 2% of its workforce (over 1,600 jobs) as part of a wider restructuring. Interestingly, under previous CEO John Donahoe, the company had shifted its structure from being organized by sport to being divided into men’s, women’s, and kids’ categories.
Some critics believe that this change reduced Nike’s innovation by focusing more on lifestyle products for a wide audience instead of performance gear for athletes. Now, Hill is reversing that structure and focusing again on sports and athletic culture. As a result, affected employees will be notified by September 8, with most changes taking effect by September 21. To make room for these conversations, Nike’s U.S. and Canadian corporate staff will work remotely during that time.
Is Nike Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Nike stock based on 18 Buys, 13 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Nike price target of $80.30 per share implies 2.6% upside potential.
