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Nike Inc. said Thursday that it would cut about 500 jobs from its Beaverton-area World Headquarters as part of its global work force restructuring.
The company announced in February that it planned to cut about 5 percent of its 35,000-employee global work force. On Thursday, the international athletic apparel company said it had completed its review and planned to begin layoffs in the next several weeks.
According to a letter Nike sent to state dislocated workers unit, some of the layoffs started April 3. The layoffs should be completed by May 31.
“We remain a growth company and we know these changes have created a stronger organization that will enable us to invest in our most significant opportunities,” said Mark Parker, Nike president and chief executive officer. “However, the decision to reduce our workforce has been a difficult and challenging one as it affects our colleagues, teammates and friends.”
Employees laid off during the work force reductions will receive severance payments.
Nike told state officials that the company would provide laid off employees with a minimum of 60 days pay, continued health benefits and outplacement services.
How would you like to be working at Nike right now? For almost 3 months they have had to go to work with a big black cloud over their heads. Five percent are going to get axed however, at least 90% have to be worried. This story keeps reappearing in the local news headlines just to enforce the negativity. This story affects more than just the people who work there.
Did Nike get rid of their PR department too?
(email verified)
Thu, May 14, 2009 at 04:41 PM
Maybe Nike could stop making their shoes overseas and bring those jobs home to Oregon. I refuse to buy their shoes when I know that they are paying dirt wages to have them made and they are as expensive or usually more expensive than shoes made in the United States. Nike does seem to have a good PR department, however. I never hear them mentioned as one of those terrible companies sending jobs overseas while Americans are unemployed.
(email verified)
Thu, May 14, 2009 at 09:51 PM
Nike has handled this in the worst possible way. They announced back in Feb that layoffs are coming and keep reminding employees every week with absolutely no details. The 4% affected at HQ has grown to almost 10% and still no answers. They claim this is not a "cost cutting" measure so why is top management not affected if it is their enept leadership that lead to this over inflated organizational structure? They are the real reason 500 Oregonians are losing their job and I am sure they will give eachother nice bonuses in the process. Pretty soon they will be asking for a bailout just like all the other poorly managed companies bringing down this economy.
(email verified)
Thu, May 14, 2009 at 11:26 PM
Good comments on 3 months of black clouds at work. As jobs are outsourced and off-shored this will be a continuing trend. And as companies focus more on instant profits to boost executive compensation (sometimes called stock options) and less on long term growth, they will reap what they sow.
Also it's 5% globally but 8% of WHQ is being cut and 20% of IT. But hey we need more H1B visas because we cannot find enough IT talent in the us.
Personally, as a long timer, I am embracing this and hoping to go. This is not the company I once worked for. I am done with corporate America. Time to work for myself.
(email verified)
Fri, May 15, 2009 at 06:33 AM
Why don't they instead cut five or six fat celebrity endorsement deals? Their priorities are messed up. Between this, their extreme (successful) efforts to avoid paying Beaverton taxes and all the off-shoring they do, I see no reason to buy their products. Funny how "just do it" doesn't apply to good corporate citizenship for them.
(email verified)
Fri, May 15, 2009 at 09:15 AM
"I would be so interested to read follow-up stories about the ripple effect, of this layoff action in particular."
Me, too.
I wonder how many of those workers will be replaced by foreign nationals on the foreign worker visa programs.
Here's a classic example.
According to a Business Week article, Microsoft posted a policy proposal on Barack Obama's transition website on Jan. 5 requesting that his administration remove the caps on visas for high-skilled foreign workers.
We already import 130,000+ foreign workers EVERY month (numbersusa.com).
The company announced just 17 days later that it was planning to eliminate 5,000 jobs as well as contract jobs.
There were 186,955 jobs cut in the telecommunications, computers and electronics industry in all of 2008 up 74 percent from the previous year.
Yet compnaies like Microsoft continue their efforts to bring in skilled foreign labor. Their actions prompted a letter from Iowa Senator Charles Grassley who on Jan. 22 urged Microsoft to give priority to U.S. workers when considering layoffs.
The current cap on H-1B visas is 65,000 per year. The Department of Labor is responsible for making sure that H-1B visas do not displace American workers. But companies are often eager to hire foreign skilled workers over American workers because they can usually pay them a lower wage.
The law requires that companies pay foreign workers under the H-1B program a "fair wage", but companies will TYPICALLY USE THE LOWER END of the government wage scale and hire younger workers who will demand less than American workers.
The intent is, of course, paying lower wages and KEEPING those wages depressed. In April 2009, two researchers, Prasanna Tambe of the NYU Stern School of Business and Lorin Hitt of Penn's Wharton School, released a working paper that found that the presence of H-1Bs lowered wages for Americans by as much as 6%. But then things were suddenly shut down. According to a CNN broadcast transcript, the paper was suddenly withdrawn from public access at the Social Science Research network, and the authors are no longer giving interviews.
Wage depression also the fallout of hiring illegal aliens over unemployed Americans. In plants where ICE removed illegals, wages and benefits went up.
BTW, B.O. is looking to provide "comprehensive immigration reform" which = amnesty for 20+ million illegals and the permanent loss of 8.3 million non-agricultural jobs. I'm sure 13 million unemployed Americans appreciate B.O. "$preading the wealth" on their behalf and expen$e. Voting records of Wyden and Merkley reveal they are on board with that agenda (voting records @ numbersusa.com).
The politicians who WILL represent the unemployed American worker are becoming an endangered species, and it ain't Wyden, Merkley, OR Blumenauer.
While Nike is not a high-tech company, are they doing and has Intel done, a Microsoft manuever?
Genuinely good corporate citizens beyond charitable PR giving are becoming as rare as a buffalo in Times Square.
(email verified)
Fri, May 15, 2009 at 01:35 PM
This has been coming for several years. They started two programs under the guise of "moving employees to more strategic work" wherein they bring in H1B-based workers and foreign companies to displace "routine IT work."
Nike isn't alone in this effort. The execs at the top are simply doing what's right for them and theirs. This will continue to be the trend in corporate America because consumers demand everything cheap or free.
Nike's new "FUEL - Frequent Use of External Labor" program was aimed directly at IT staff - the rest of the "business" is unaffected. Internally, their goal seems to be pretty clear since moving most of their internal IT to LMCO in the late 90's: eliminate the IT proletariat.
Nike has been simultaneously one of the best and worst companies I've ever been at. One of the worst because really, really bad managers are promoted over competent ones, and the effects last for years.
Maybe that's why Phil hates IT - he can see the incompetence all the way from his office.
(email verified)
Fri, May 15, 2009 at 08:49 PM
"skilled foreign labor"? WHERE? When it takes 5-6 inexperienced overseas developers to replace 1 experienced one that can communicate and understands the business processes, there is NO savings for using overseas labor. Costs you mroe in development and you need a lot more analysts & managers to watch everything they do. The right questions are NOT being asked. The right decisions are not being questioned/challenged. Instead, they move forward with massive ERP & WMS packages without addressing the core process issues that cost the company money. Internally focused companies looking only at the short term eventually die.
(email verified)
Mon, May 18, 2009 at 10:15 PM
Re: Nike cost savings from using foreign labor-
Nike and other large corporations don't care about "efficiency", or "rational business decisions"... having worked there for many years, it's obvious management doesn't plan for the long term. They are only concerned about quarterly earnings reports to Wall Street. Therefore, a one-time savings on labor (by hiring through H-1B) looks very good on a Q4 earnings report. Never mind that foreign IT labor doesn't know the business, and actually causes a drain on profits over the long-term. It's all about instant gratification, and propping up the stock price! Just like when Nike fired their desktop support company, and replaced it with Siemens, who didn't know their rear from a hole in the ground. Siemens did their shoddy work much more cheaply than the previous company, so it was a big Q3 budget savings... the attitude is, we'll worry about the long-term consequences of our miserliness later. But we'll get the big stock boost now, and that's all that matters!
(email verified)
Tue, May 19, 2009 at 10:33 AM
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Re: Nike cuts 500 jobs from Oregon HQs
I would be so interested to read follow-up stories about the ripple effect, of this layoff action in particular. Because I know a few people at NIKE, I’ve always imagined I’m only 3 or 4 or 5 contacts away from Michael Jordan, Tiger Woods, Bo Jackson, and dozens of other sports heroes, as in Six Degrees of Separation. Of course, no sports figure is going to lose his or her job because someone at NIKE Beaverton did. Rather, I mean to say that I would be curious to understand more how one person unemployed from Nike in Beaverton affects our community and ripples out from here to others locally and beyond. I’m not sure how such a story could be pieced together but with all the social networking tools at our disposal it seems possible to see a few people’s pebbles’ trajectory through these rough waters, so to speak…
"wanted = More info as it unfolds"
(email verified)
Thu, May 14, 2009 at 04:32 PM