Nike has initiated another round of technology staff reductions, continuing the company’s sweeping restructuring plan announced earlier this year. According to internal communications obtained by The Oregonian, the sportswear giant is cutting approximately 200 technology positions across its digital innovation teams.
This marks the third wave of layoffs at Nike since January, when CEO John Donahoe unveiled a $2 billion cost-saving initiative designed to streamline operations and redirect resources toward high-growth opportunities. The company had previously eliminated roughly 1,600 positions globally, with significant impacts at its Beaverton, Oregon headquarters.
“We’re making difficult but necessary adjustments to align our technology capabilities with our consumer-direct acceleration strategy,” said a Nike spokesperson in a statement to Epochedge. The company emphasized that affected employees would receive severance packages and outplacement services.
Industry analysts view these cuts as part of Nike’s broader struggle to successfully execute its digital transformation. The company has invested heavily in direct-to-consumer channels and technology infrastructure since 2020, but results have been mixed.
“Nike is essentially admitting that certain digital bets haven’t delivered expected returns,” explains Jessica Ramirez, retail analyst at Jane Hali & Associates. “They’re recalibrating their approach to technology while still maintaining their overall direct-to-consumer direction.”
The technology reductions come amid challenging market conditions for Nike. The company’s stock has declined approximately 25% year-to-date, underperforming both the broader market and key competitors. In its most recent quarterly earnings, Nike reported a 2% drop in revenue and lowered its full-year outlook, citing weakened consumer demand and increased competition.
Several technology workers, speaking on condition of anonymity, described mounting pressures within Nike’s digital division. “There’s been a significant shift in priorities,” said one recently departed employee. “Projects that were considered crucial six months ago have been shelved or dramatically scaled back.”
Nike’s digital transformation began accelerating in 2020 with the launch of its Consumer Direct Acceleration strategy, which emphasized direct relationships with consumers through Nike-owned channels. The company invested substantially in mobile apps, data analytics, and supply chain technology to support this vision.
Financial data reveals the stakes of this strategic shift. Direct-to-consumer sales now represent approximately 42% of Nike’s total revenue, up from 29% five years ago. However, the costs associated with building and maintaining the necessary technology infrastructure have pressured margins.
Matt Powell, former NPD Group analyst and founder of Spurwink River consultancy, notes that Nike isn’t alone in recalibrating its digital ambitions. “We’re seeing a broader industry reassessment of technology investments,” Powell told Epochedge. “Companies are becoming more selective about which digital initiatives truly deliver value versus those that simply add complexity and cost.”
The Portland technology job market will likely absorb many of the displaced workers. The region has seen significant growth in its tech sector, with companies like Intel, Amazon, and numerous startups maintaining substantial operations in the area.
For Nike, the challenge remains balancing cost-cutting with maintaining competitive technological capabilities. The company still faces significant challenges from both established rivals like Adidas and emerging competitors like On Running and Hoka.
“This restructuring appears necessary but carries risks,” observes Tom Nikic, senior analyst at Wedbush Securities. “Nike needs to ensure they’re not cutting muscle along with fat as they streamline their technology operations.”
Nike’s leadership maintains that the restructuring will position the company for long-term growth. In recent investor communications, executives have emphasized focusing resources on key growth categories including women’s products, running, and the Jordan brand.
The technology reductions also highlight broader tensions within the athletic apparel industry as companies navigate uncertain economic conditions. Rising inventory levels, changing consumer preferences, and supply chain complexities have pressured margins across the sector.
Nike’s next earnings report in late June will provide additional insights into whether these cost-cutting measures are improving financial performance. Investors will be watching closely for signs that the restructuring is having the intended effect without compromising the company’s market position or innovation capabilities.
As Nike continues its transformation, the company faces the delicate balance of reducing costs while maintaining the technological edge that has historically been central to its competitive advantage in the global sportswear market.
