The Zhitong Finance App learned that while the parent company Nike (NKE.US) is cutting the number of employees in various departments to save costs, Converse (Converse) is also carrying out layoffs in line with Nike's major cost reduction measures. According to information, Nike is implementing a “cost reduction plan” of up to 2 billion US dollars, which includes layoffs of 2% of employees. According to an internal memorandum seen by the media, the company's Oregon headquarters has already carried out two rounds of layoffs, and it is expected that the layoff process may be completed before Nike's end of this fiscal year.

According to information, Converse, a world-renowned sports and leisure brand headquartered in Boston, has its own product development, supply chain, and marketing functions specific to its business. However, the brand uses innovative technology from parent company Nike in its products.

It's unclear how many Converse jobs the decision will affect. A Converse spokesperson said in a statement Tuesday that the company “is realigning some teams to better support future performance growth.” “We can confirm that the overall adjustment changes to Converse employees are included in parent company Nike's 2% overall layoff plan; however, we are operating on an independent schedule.” The Converse statement shows.

As of May of last year, Nike had nearly 84,000 employees worldwide. Converse (Converse), which is famous worldwide for Chuck Taylor and One Star sneakers, accounts for about 5% of Nike's total sales.

In terms of Nike's performance, the results for the third quarter of fiscal year 2024 showed that Nike's sales in the Chinese market continued to slow during the holiday season, but thanks to better-than-expected growth and price changes in the North American market, the sporting goods retailer's revenue and profit eventually exceeded expectations. In December of last year, the company announced an extensive restructuring plan to cut costs by approximately $2 billion over the next three years.

Additionally, the company lowered its revenue outlook data due to warnings of weak demand in the coming quarters. The company is “prudently planning” to lower its revenue guidance for the first half of fiscal year 2025 to a low single digit level, which reflects a “weak global macro outlook.” Nike also expects gross margin to grow by about 1.2 percentage points for the whole year, which is lower than analysts' expectations of 1.4 to 1.6 percentage points.