Nike Faces Backlash After Significant Layoffs in Sustainability Teams

Nike has faced intense scrutiny after implementing substantial layoffs, including significant cuts to its sustainability teams, earlier this year in an effort to reduce costs. This move came ahead of a disappointing earnings call this summer.

Recent investigations by local Oregon media have revealed the specifics of the layoffs, which affected 1,500 employees globally, including 700 in Oregon. Among those affected, nearly half were high-ranking executives such as vice presidents, senior directors, and directors.

A collaborative report by The Oregonian and ProPublica uncovered that approximately one-fifth of Nike’s sustainability staff were laid off, a much higher proportion compared to the 2% global and 7% Oregon-wide cuts. Additionally, about 10% of the sustainability employees either quit or were reassigned.

This revelation raises questions about Nike’s commitment to its environmental goals. Despite the company’s ambitious sustainability pledges, their carbon emissions have slightly increased since 2015. Although Nike did not confirm the specifics of the layoffs, its chief sustainability officer emphasized the company’s ongoing dedication to sustainability, stating, “We’re not walking away from sustainability. I mean, full stop. We are committed.” She explained that the company is adopting an “embedding” approach, integrating sustainability into every employee’s responsibilities.

However, a former Nike employee described the layoffs as a “sustainability bloodbath,” highlighting the severity of the cuts.

These developments add to a series of challenges for Nike. A disappointing earnings report in June, which saw a 2% drop in revenue, led to further criticism. The company’s stock has also suffered, dropping from over $120 per share last year to around $70. Industry analysts and critics have pointed to broader issues, suggesting the need for significant changes within the company.

Nike’s struggles with sustainability are not unique; competitors are also facing difficulties in meeting their environmental targets. A former McKinsey executive noted that many companies are finding it challenging, if not impossible, to achieve the ambitious goals set in previous years, indicating a broader industry trend of adjusting or delaying sustainability targets.