Nike, the world's largest maker of athletic shoes and apparel, will cut 5 per cent of its 35,000-strong global workforce, or 1,750 jobs, in the largest headcount reduction in the company's history.
The sweeping overhaul to boost competitiveness and clamp down on costs for the owner of the famous "swoosh" logo will include about 500 positions at Nike's Beaverton, Oregon, headquarters, the company said last night.
Nike said it employs about 6,800 workers at its headquarters.
The sports-gear brand first said in February that a review of its sprawling worldwide operations would likely result in a 4 per cent staff reduction, or about 1,400 jobs.
Nike has already choked off production at factories in China and Vietnam, trimmed marketing spending, and reorganized its global business into six geographical groups, making China its own region.
While trying to weather a downturn in consumer spending by streamlining its global supply chain and flattening management, Nike has remained relatively resilient during the slump.
Still, shares have lost nearly a quarter of their value in the last year.
The company has banked on the cachet associated with its brand and a diversified portfolio to help it stay on course even as rivals Adidas and Puma have stumbled.
The company's sales declined in its most recent quarter, especially in Europe. Quarterly margins are also under pressure, but the company's selling, general and administrative costs fell nearly 4 per cent in its most recent third quarter.
Nike said it hoped to complete most of the layoffs over the coming weeks. The company's shares held steady in after-hours trading.
“Our new structure sharpens our consumer focus globally to drive continued growth," CEO and President Mark Parker said in a statement. "The decision to reduce our workforce has been a difficult and challenging one.
Besides layoffs, the company has been adjusting its supply chain to cut costs. In March, Nike said it would halt production at three of its Chinese factories and one in Vietnam, which use contract workers not directly employed by the company.