Nike has confirmed layoffs in its technology division, according to a company representative.

The changes, announced last week, involve transferring certain responsibilities to third-party vendors.

The company did not disclose the exact number of employees affected by the layoffs.

It is also unclear how many individuals currently work in Nike’s technology division.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Tech overhauls reflect Nike’s broader cost-cutting strategy

The recent technology division layoffs follow a larger February restructuring where Nike cut approximately 1,600 jobs (about 2% of its workforce), primarily targeting senior leaders in technology and marketing departments 1.

These strategic cuts come after Nike revised its sales outlook downward and announced plans to slash $2 billion in costs over the next three years amid declining stock performance, which is down 13% year-over-year 1.

The company’s shift toward third-party vendors for technology functions signals a fundamental change in how Nike views its in-house technical capabilities, prioritizing external partnerships over internal development 2.

This restructuring follows multiple leadership changes, including a new CEO who took the helm in October to address innovation challenges that have seen Nike lose ground to more nimble competitors 3.

2️⃣ Nike’s tech troubles have deep roots predating the current cuts

The current layoffs follow years of documented challenges within Nike’s technology division, highlighted by a leaked 2022 employee survey that revealed widespread dissatisfaction and burnout among tech workers 4.

In that survey, nearly 300 technology employees reported significantly lower job satisfaction compared to other departments, with specific concerns about leadership confidence and work-life balance that led many to consider leaving 4.

Multiple reorganizations had already created confusion and instability among tech workers, with employees specifically criticizing Nike’s return-to-office policies and expressing desire for more flexible arrangements 4.

Then-CEO John Donahoe publicly acknowledged these challenges with “employee fatigue and productivity” in response to the survey, suggesting Nike has struggled with its technology strategy for years before these latest cuts 4.

3️⃣ Sustainability and innovation targets recalibrated amid market pressures

Beyond technology, Nike’s commitment to other strategic initiatives has also wavered, as evidenced by cuts to its sustainability team that were proportionally much deeper—approximately 20% of that department compared to the 2% overall reduction 5.

These targeted cuts have affected senior leadership disproportionately, with nearly half of the 700 Oregon-based job cuts being vice presidents or senior directors, suggesting a fundamental reshaping of Nike’s organizational priorities 5.

The company has struggled to meet its sustainability goals, with emissions reportedly increasing since 2015, mirroring challenges faced across the apparel industry that may lead many companies to revise their commitments 5.

Nike’s stock has declined dramatically, trading around $70 down from over $120 a share, putting significant pressure on leadership to prioritize short-term financial performance over longer-term strategic initiatives 5.

Recent Nike developments

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