Nike will cut about two percent of its global workforce as it changes its organizational structure and reduces number of shoe styles. Fred Katayama reports.
Nike is going through a shakeup. It's cutting 1400 jobs. That's about two percent of its global workforce. It's also eliminating shoe styles, shifting its focus to newer models with high growth potential in sports such as running, basketball, and soccer. In addition, Nike wants to slash the time it takes to create new products in half. The job cuts and the new business plan come as Nike is changing its organizational structure to better compete with a resurgent Adidas and a fast-growing Under Armour. But Nike shares plunged on the news. Berenberg Capital Markets analyst Corinna Freedman. (SOUNDBITE) CORINNA FREEDMAN, U.S. CONSUMER DISCRETIONARY ANALYST, BERENBERG CAPITAL MARKETS (ENGLISH) SAYING: "I think that they are refocusing for growth. They did have a similar workforce reduction in 2009 of, I think, it was a bout five percent, 1700 jobs at that point, and that was the beginning of a phenomenal growth period for the company. So I don't think necessarily that job cuts are indicative of slowing growth. I think that is a reality today that all firms are getting more efficient." Nike still holds a fifty percent share of the U.S. market. But, after more than a decade, it lost the top-selling sneakers title to Adidas last year.