FASHION SYSTEM

NIKE AS AN EXAMPLE OF CRISIS IN FASHION: NEW LAYOFFS

FASHION SYSTEM
The fashion industry is grappling with significant layoffs, with Nike emerging as a stark example. In a recent development, hundreds of employees have been laid off at Nike, with the company's Oregon headquarters bearing the brunt of the second wave of cuts. Nike Inc. is on track to eliminate approximately 740 jobs at its headquarters by late June as part of its ongoing cost-cutting strategy.

Michele Adams, Nike's vice president of people solutions, disclosed in a filing with the state of Oregon that these layoffs mark the "second phase of impacts" as the sportswear giant continues to streamline its workforce. This move comes in line with Chief Executive Officer John Donahoe's announcement in December, wherein he outlined plans to reduce the global headcount by 2% as part of an initiative to achieve up to $2 billion in cost savings over the next three years.

The process of downsizing at Nike commenced in February, with the company aiming to wrap up the restructuring by the end of its fiscal year, as per an internal memo obtained by Bloomberg News. Donahoe emphasized the necessity to "edit, shift, and divest less critical work" to prioritize essential aspects of the business in order to stay competitive.

Experts point to a deeper crisis within the traditional fashion sector, attributing it to an outdated business model characterized by excessive centralization, overproduction, unsustainable supply chains, inadequate business ethics, and a dearth of innovation. This crisis underscores the urgent need for industry-wide reform to address these systemic issues and pave the way for a more sustainable and resilient fashion landscape.