Nike plans to cut jobs, slash shoe styles

NIKE Inc said yesterday it would cut about 2% of its global workforce and eliminate a quarter of its shoe styles as it looks to become nimbler in the face of intensifying competition and fastchanging consumer trends.

Nike said it would reduce the number of its business segments to four from six as part of the initiative, being rolled out at a time the company is battling for market share in North America with a resurgent Adidas AG and a fast-growing Under Armour Inc.

Shares of the world’s number one shoemaker were down 2.7% at $53.59 (R694) in early trading, making them the biggest percentage loser on the Dow Jones Industrial Average.

Under the plan, called “Consumer Direct Offense”, Nike will concentrate on 12 key cities in 10 countries, which are expected to represent over 80% of its projected growth through 2020.

These cities include New York, Berlin, Paris and Barcelona.

The company also said it would focus on newer styles, such as ZoomX, Air VaporMax and Nike React, and on categories with high growth potential, including running, basketball and soccer.

While Nike still holds a 50% share of the US market, Adidas’s retro Superstar shoes toppled Nike last year to become the top-selling sneakers in the United States.