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MGO spent millions on their conference a couple of weeks back. The L4 and up crew gets paid trips each year to have fancy retreats. We have people flying in for some stupid Leadership summit, and spend so much on things that do not really matter.
Redirect these kumbaya events into actual products and services, Mr. Stankey.. or just use that to pay / keep people instead of firing them in the name of AI savings.
No more layoff warning ahead !!!
Another shitTel id--t CEO after another one
Serious threats to fire anyone for chip bugs from a guy that never know how do design a CPU.
One the famous news
https://www.tomshardware.com/pc-components/cpus/intel-ceo-lip-bu-tan-stamps-out-chip-bugs-with-aggressive-new-quality-standards-says-major-validation-errors-can-result-in-termination-b0-you-keep-your-job-anything-above-that-you-are-fired
While Microsoft offers 4 millions dollars to find bugs for its ai & cloud bug bounties
https://www.zdnet.com/article/microsoft-offers-4-million-in-ai-and-cloud-bug-bounties-how-to-qualify/
Here are some new sheet ideas for those workbooks that guide leaderships decisions. I know that our country and our citizens welfare will not be factored in.
Talked to a few hiring managers on Friday and they all echoed the same thing , the last few weeks were the toughest they’ve ever had to maneuver. Every open position was flooded with applications . multiple leaders recommending and putting referees for their own people , non stop calls and emails for referrals all against a deadline to hire before the end of May. Managers were grinding through 8 to 10 interviews a day, trying to balance candidate situations like urgent visa situations and ongoing medical treatments. So people who found internal roles during this time was due to strongest leadership push rather than the best skills. glad May is wrapped up so everyone can take a breath and move on. I am sure there is better way to do this ..
Standard Chartered CEO Bill Winters is facing backlash after telling reporters the bank plans to replace "lower value human capital" with AI.
The phrase immediately sparked criticism, with many interpreting it as a reference to employees whose jobs may be automated. While Winters later apologized and said he was referring to workplace transformation rather than the value of workers, the comment has continued to circulate widely on social media.
The controversy highlights a growing tension across industries as companies accelerate AI adoption. Workers are increasingly concerned that executives view AI primarily as a cost-cutting tool, while leaders argue that automation will improve efficiency and reshape job responsibilities.
Regardless of intent, the phrase "lower value human capital" struck a nerve. For many employees already worried about AI-driven job displacement, hearing senior leadership discuss workforce changes in those terms reinforces concerns about how companies view their people.
As banks and other large employers continue investing heavily in AI, expect greater scrutiny of both workforce reduction plans and the language executives use when discussing them.
Was this simply a poor choice of words, or an honest glimpse into how some executives view employees in the AI era?
Zebra became very hierarchical at the Director and VP level several years ago. It’s an acute problem now.
Seems to be deep reluctance to cull the herd of ineffective Directors and VPs, or do away with layers.
For a $6 B company Zebra is ridiculously hierarchical and top heavy these days. It didn’t use to be this way.
Part of the issue is that Zebra leadership felt compelled to promote hordes of the best and brightest, and to promote women and minorities to make a declarative statement as an unapologetic liberal leaning and DEI embracing company.
All well and good but look around today.
It’s about time these fu--ing millionaires in the C-suite open up a town hall for real questions.
Do it, cowards.
In a particular work group this morning, a detailed email was sent out instructing team members on how to handle complicated work inquiries. There were bullet points and seven different email points to use. This was done, allegedly to improve efficiency. That afternoon, with no notice at all, the name of the Teams Channel used for the entire group to communicate was changed without notice. Staff searched emails to find the notice. There was none. Finally, a team member posted the obvious question. Why? What happened? Had a notice been missed? A senior leader posted back, "No, there was no notice." Nowadays, it's easy to incite a mild panic. WTF? About an hour later, the senior leader posted again, the name change was to bring it into alliance with other name changes. And yet, no one showed the team the respect that a brief email would have provided. Employees remain an afterthought.
Looks like a downward trend. How long before leadership is getting culled? Or is miserable results acceptable now?
Anyone know what happens after you decline the move? How long do they keep me around waiting ? I’ve handed off all my work to other members of the team and cross training is complete. The letter says up to the discretion of my leadership.
Commercial Real Estate ..
This board should be viewed for what it is… a discussion board for current employees concerned about their careers (with some crazy types) and feedback for those considering wearing “the purple.”
First, you need to ask yourself why so many senior executives have left the bank.
Second, compare the value of both banks at the merger to the value today. I have gotten better returns on my bucket of old pennies with the increase in copper. Pay increases too.
Third, in case you have not figured it out by now it all about the face time and showing off for your manager and their boss.
Now this brings me to the title above.
What a show ineptitude! Thanks Kathy, Joe Pella (Joey – shave that stubble) and Adam Oats who?
Largest markets, Florida, Georgia, Texas and North Carolina Commercial Real Estate, how many of those folks are still here, clients included? Hmm.. all voted with their feet. Even new hires have moved on with corresponding fill in the gap uplifting reorg calls.
Same thing for Grandbridge, everyone left? Why? Oh, and the bank still has a lawsuit against them too. How much is that costing? Interesting read if you have the time. Just wait until they put Kathy on the stand. Can’t wait.
So, what’s the point of this? If you are visiting this site, you need to prepare to set sail for a new adventure and not wait for the next purpose corner or employee survey. Yes, I’m out shortly. Might even get severance and a new job signing bonus if I am lucky.
You?
Seems Nico Friedman, till now Ash Nawani's replacement as head of risk management, has announced that he is now also the CRO for Citibank, NA in addition to the role of head of risk management?
WHat happened to Zdenek Turek? Fired?Left on his own?
The more I read these threads, the more I see the same people saying the same things. It’s a bit sad really.
Former employees. Retirees. People who left years ago but still seem oddly invested in every headline and every rumour. I know a few of them personally - nice people but it’s a bit tragic how their identity is tied to a company. They read something in the papers and appear here as though they’re still sitting in the office. They would spend their kids wedding taking about what bp is doing wrong - true story. I find it quite sad, if I’m honest. At some point, you have to move on. Bp owes you nothing. You signed the contract. They followed it.
On bullying, there is truth in it. The post naming initials was accurate. Some of those behaviours were disgraceful and remain a stain on bp’s history. During the ‘good’ years, too many people got away with things because they delivered results. BL a casing point. There are others who could be added to that list. The difference now is that those behaviours are no longer ignored.
What I struggle with is the constant bitterness. A lot of the loudest criticism comes from people carrying old grudges, people who never got the promotion they wanted, or people who have convinced themselves that bp was the source of every setback in their career. That’s an easy story to tell yourself. It just isn’t always true. Let’s leave the future to the generation trying to turn this around.
One of the best things bp has done recently is show some backbone. Poor behaviour is being called out. People are being held accountable. BL and AM are examples. One person who should not be allowed to quietly disappear into the background is (*D) AC. A complete failure of leadership, judgement and self-awareness. Time to go.
The portfolio review is the right decision. Not everyone will agree with it. That’s fine. Leadership is not about making decisions that please everyone. When the details are announced, the reasoning will be clear enough.
And on Meg, I couldn’t disagree more with some of the comments made here. I’ve worked with a number of CEOs, inside and outside bp. She is one of the most impressive. The direction is right. The priorities are right. And she has dealt with a series of challenges that were not of her making with real composure and resilience.
I’ll leave it with this:
“It is not the critic who counts…”
It’s always easier to sit in the stands and tell everyone else what they should have done. Much harder to be the one making the decisions when the outcome actually matters. That’s the difference.
IBM is booming. All you naysayers out there. Apologize for your hate and bile.
Arvind is leading us into the Future
because openly talking about the sh-t show I am experiencing to anyone here puts my job at risk. Communication between the groups is not as good as it was before Nov 2025. Project progress has slowed, keeping up with changes in direction is ridiculous. and trying to keep quality in the contractors' work is, well, impossible (too much to oversee). Leadership should not have wiped out so many good people in that last big layoff. This is my experience. Is it just me, or are others in this market also at their limit?
ELT, GPs and other senior leaders - Please watch Company Retreat on Prime before you do anything more. It's the sequel to Jury Duty and raises many themes we're all experiencing now. Watch how your families react. Notice which characters resonate with you, your (age appropriate) children, and spouses. Notice who the bad guys are and why.
Associates on this forum, please watch it too, if only to remember what a workplace family can be like, to mourn what we're losing, and laugh a bit too. Remember, most people are GOOD people and not solely in this life for money. Yes, it's a fictional story, but the themes are real as can be and at once topical and old as time.
OMG am I sick of seeing and hearing and worst of all seeing that id--tic Lego looking thing Bob. Since Robbie Thomas will soon replace the dinosaur that Arvind is now 4 years past IBM's tradition of leaving at 60, why the heck did they at least call it Rob? These are the mtgs and debates IBM's army of DEI execs and legal and finance teams now have. 6 months of mtgs and 4,000 people involved and they land on Bob. What a dumpster fire IBM-Bob-Rob is. Sad.
Sorry to the dedicated people of NJ as your leaders let you down. Come join NJ’s #1 tech brand!
https://www.globalbankingandfinance.com/exclusive-ousted-bp-chair-met-activist-shareholder-elliott/
Don't know about you, but AM is growing on me. The company needs someone who is willing to give it a kick up the **.
I hear some managers are addressing with local teams and the results are bad. Why hasn’t c-suite addressed it? Do you think they are waiting for a TH? I would think some short-term communication from the top would really help clear things up and keep everyone aligned on improving the company
Why bring in an external hire to replace a C suite executive? Is there no one internal qualified? What’s the rationale?
Fancy Name Tags ( especially as if I invented the AI ) doesn't add ANY value to the corporation..
Through the years I’ve amassed lots of AT&T stock. My frustration level with our so called leaders has never been higher. I’m ready to dump it all and invest in much better companies that will easily return more than the T dividend could ever deliver. Has anyone else decided the same? TY
The author criticizes tech CEOs for mass layoff decisions. He argues against replacing employees with artificial intelligence. The article highlights flaws in current leadership strategies. Many leaders are misguidedly following this layoff trend. The author urges a reevaluation of these workforce reduction tactics.
https://www.inc.com/joe-procopio/the-flaws-in-mass-layoffs-for-ai-productivity-are-beyond-obvious-now/91351132
Rawul made appearance, got a hour of his sports franchise to work at DXC.
He wants everyone to AI up for no pay.
Whilst his racking in the money everywhere, how does that work?
Doesn’t seem like the leadership is doing a very good job or even cares about their members. Hearing a local chairman, got taken out by management at the same location of the previous local chairman was taken out at. Seems like targeting… Not to mention, it was next to nothing as far as involvement with the last contract between members and union officials.
Aren’t they supposed to represent the members or is being in bed with management too comfy?
The town hall felt like the usual, with a few stand out moments. Plants legitimately asked how to get a req approved and filled faster and basically got an answer that EVP reviews weekly but other than that, we just don’t know! Also, having EVP say he’s not a process guy is frustrating- isn’t poor and cumbersome processes (tickets and self-serve apps that get you nowhere) a big part of the problem? That is probably the reason so much time is spent on calls and meetings and meaningless metrics. Joking about being EVP for a quarter means he outlasted the last guy was actually funny, but if exec levels turnover that fast, why wouldn’t employees? Don’t they quit bad managers before they quit bad companies? I guess we just need to be on site and that will fix things
Clown show continues! How that bozo got anyone to hire him is beyond comprehension.
https://www.prnewswire.com/news-releases/sol-consulting-launches-solassist-expanding-ai-acceleration-practice-with-former-xerox-executives-302782293.html
After 36 years at Fidelity, I have learned that every generation of associates eventually faces a moment when the conversation gets heavy.
People start asking whether the company is changing too much. Whether the culture is still the same. Whether the future is secure. Whether leadership understands the pressure people are feeling. Whether the next reorganization, strategy shift, technology wave, or market cycle means something worse is coming.
I understand those concerns. I have lived through enough change to know that uncertainty is real. It affects people, families, teams, confidence, and morale. I would never dismiss that.
But I would also offer this perspective: catastrophizing has never helped anyone build a better career.
Fidelity has never been a static company. It has grown, reorganized, adapted, expanded, corrected, invested, simplified, and reinvented itself many times. That is not a sign of failure. That is one of the reasons Fidelity has endured.
A long career teaches you that companies, like people, go through seasons. There are seasons of growth, seasons of constraint, seasons of reinvention, seasons of discomfort, and seasons when the path forward is not as clear as we would like it to be. The mistake is assuming that a difficult season is the whole story.
It is not.
Fidelity remains a company with tremendous strengths: deep customer trust, a respected brand, scale, financial discipline, a broad business model, talented associates, and a history of finding its way through change. That does not mean every decision will feel perfect. It does not mean every associate will experience change the same way. But it does mean that this is still a place where people can learn, contribute, grow, lead, and build meaningful careers.
To those early in your career: do not let fear become your career strategy. Listen, learn, and be aware of what is happening around you, but do not let anonymous anxiety define your view of the company or your future. Build skills. Build relationships. Ask for feedback. Understand the business. Volunteer for hard problems. Become known as someone who is reliable, curious, adaptable, and focused on outcomes.
A career is not built by waiting for certainty. It is built by becoming valuable in uncertain environments.
To those who have been here a long time: our experience matters, but only if we keep converting it into relevance. We have seen cycles before. We know that the mood of the moment is not always the truth of the future. Our role is not to deny that change is hard. Our role is to help others navigate it with perspective, steadiness, and maturity.
Long-tenured associates have a responsibility to be culture carriers, not nostalgia carriers. We should remember what made Fidelity special, but we should also help shape what Fidelity needs to become next.
That means mentoring newer associates. Sharing context. Reducing noise. Solving problems. Staying open to new tools, new ways of working, and new business realities. It means being honest without being cynical, realistic without being fatalistic, and loyal without being blind.
There is a difference between concern and catastrophizing.
Concern asks: What can I learn? How can I prepare? Where can I contribute? Who needs my help? What skills do I need next?
Catastrophizing says: It is all broken. Nothing matters. The future is already lost.
I do not believe that. Not after 36 years.
What I believe is that careers are built through adaptation. Reputation is built through consistency. Leadership is built through how we show up when things are unclear. And culture is built by the daily choices we make in how we treat each other, how we talk about the future, and whether we choose to contribute or simply complain.
Fidelity is not perfect. No company is. But it is still a place with opportunity for people who are willing to grow, stay curious, build trust, and focus on meaningful work.
The best advice I can offer is this: do not outsource your outlook to the most anxious voice in the room.
Pay attention. Be thoughtful. Prepare yourself. Keep learning. Take care of your network. Take care of your reputation. Take care of your teammates. And remember that your career is bigger than any one rumor, reorganization, difficult quarter, or online thread.
I have seen Fidelity change many times.
I have also seen people build remarkable careers here because they chose resilience over fear, contribution over cynicism, and growth over retreat.
That opportunity still exists.
The question for each of us is how we choose to show up now.
Here's an update from the UK Telegraph. It's behind a paywall, so I've copied it here. Seems AM was also questioning the hospitality spend, with particular reference to highly expensive Wimbledon tickets. I recall seeing photos of BL and his partner at the tournament in July 2023. Nice to know who was really paying for them.
Ousted BP chairman hits back over ‘excessive’ spending
Dismissed chairman suggests his ‘determination to drive change’ is behind misconduct allegations
Albert Manifold said his cost-cutting measures, such as foregoing limousines and private jets, may have ‘ruffled feathers’
Christopher Jasper
The ousted chairman of BP has attacked a culture of “excessive” spending at the oil giant, including purchasing tickets for sports events such as Wimbledon.
Albert Manifold suggested he had been forced out of BP after raising concerns over “unnecessary expenditure”.
Mr Manifold was dismissed without warning on Tuesday, with people close to the BP board suggesting he had been shown the door because of a “volcanic” temper, “bullying” and “verbal abuse”.
However, in a 769-word statement published on Thursday, Mr Manifold said he had been the victim of “lies” from people hiding behind “anonymity”.
He said that during a 40-year career he had “never once had accusations made against me such as those made in recent days”.
During his eight-month tenure at BP, Mr Manifold is understood to have proposed a crackdown on unnecessary spending, such as some corporate events.
Events attended by board members at the expense of the company are said to have included Wimbledon.
A source close to Mr Manifold said: “He feels that that is one of the reasons the board turned on him. Some members didn’t share his commitment to cost-cutting and budgeting.”
Ousted BP chairman hits back over ‘excessive’ spending
Dismissed chairman suggests his ‘determination to drive change’ is behind misconduct allegations
Albert Manifold said his cost-cutting measures, such as foregoing limousines and private jets, may have ‘ruffled feathers’
Christopher Jasper
Transport industry editor
28 May 2026 4:21pm BST
The ousted chairman of BP has attacked a culture of “excessive” spending at the oil giant, including purchasing tickets for sports events such as Wimbledon.
Albert Manifold suggested he had been forced out of BP after raising concerns over “unnecessary expenditure”.
Mr Manifold was dismissed without warning on Tuesday, with people close to the BP board suggesting he had been shown the door because of a “volcanic” temper, “bullying” and “verbal abuse”.
However, in a 769-word statement published on Thursday, Mr Manifold said he had been the victim of “lies” from people hiding behind “anonymity”.
He said that during a 40-year career he had “never once had accusations made against me such as those made in recent days”.
During his eight-month tenure at BP, Mr Manifold is understood to have proposed a crackdown on unnecessary spending, such as some corporate events.
Events attended by board members at the expense of the company are said to have included Wimbledon.
A source close to Mr Manifold said: “He feels that that is one of the reasons the board turned on him. Some members didn’t share his commitment to cost-cutting and budgeting.”
In response, a source close to BP suggested it would not have been unusual for the firm to take up tickets to entertain business clients at events such as Wimbledon.
BP also has a history of hosting politicians – many of whom have backed the oil industry – at the tournament, and was revealed in 2023 to have donated tickets worth more than £4,200 to two MPs and a government minister.
Before his removal, Mr Manifold reportedly clashed with BP’s company secretary and board member Ben Mathews over costs.
Mr Mathews, whose role is to advise the board on corporate governance, was a key architect in the push to oust Mr Manifold, according to the Financial Times. He has since been put on medical leave because of stress after having dealt with the departures of Mr Manifold and his predecessor Helge Lund in quick succession.
BP did not immediately respond to requests for comment regarding spending by directors.
In his statement, Mr Manifold said he was dismissed after he had “sought to streamline and refresh the board and started to advocate for a review of the workings of the board to improve efficiency”.
Called out excessive expenditure
Mr Manifold said he had wanted to “set an example” at BP and detailed how he demonstrated this by making his own coffee, buying his own lunch and resisting the use of private jets.
He added: “Where I saw unnecessary or excessive expenditure, I called it out. I had no interest in having a dedicated chauffeur-driven limousine at my beck and call on the occasions that I was in London.
“I, like most people, walked, took taxis, trains, etc. I had no interest in taking private aviation nor in availing myself of corporate tickets for sports events. I made my own coffee and bought my lunch in the local café. I sat in a small office, eschewing the grand corner-office privilege of previous chairmen.”
However, he said, those priorities “were not always shared by everyone”.
He added: “In business, small signals matter in driving change and contribute to ensuring no company has a culture of entitlement.
“All of this was my attempt to ensure the continuing independence and transparency of the board and the ongoing improvement in oversight and governance.”
Mr Manifold praised BP’s chief executive Meg O’Neill, its chief financial officer Kate Thomson and the wider executive team as being “among the finest people I have worked with”, saying they were “brimming with integrity”.
Jamie will soon be our new boss after the acquisition. Will he be any better?
That Dhivya has updated her email signature to be Dhivya(i) to hammer home the theme of AI prioritization.
So in Private Wealth, you can hemorrhage assets, loose your top producers and get promoted to Chief Investment Officer. Talk about failing upward. Only at US Bank.
Kevin O’Leary said recently he doesn’t care if someone works “from their basement” as long as they can execute and deliver results. That’s the part “leadership” still doesn’t seem to understand.
https://fortune.com/2026/03/10/shark-tank-kevin-oleary-ai-tech-gen-z-rto-office-cubicles-corporate-america/
We already proved remote work works. The job gets done. In a lot of cases productivity improved, turnover dropped, and companies saved money. Even Stanford research still shows hybrid schedules had zero negative effect on productivity while reducing turnover.
Instead, we are doubling down on badge swipes, presence reports, and forcing people back into traffic for work that still happens on laptops and Teams calls all day.
People aren’t frustrated because they “don’t want to work.”
They’re frustrated because leadership saw proof that flexibility worked… and ignored it anyway. They chose max pain and misery over common sense and happy employees.
If Nike was doing things right then 18 months under EH should have come out with next generation of new designs and new strategy as to how to attack and new story line. Cricket~?
Instead from EH all we hear same old recycled corporate restructure narrative, at this time frankly it is getting old.
I was at UA when sh-t was going down and they played the same movie so I have seen it before. Promises and promises until the CEO cannot lie no more and next CEO comes in until he cannot BS no more on and on until the company is done.
@cx+1kr2mtsk2 said it well.
How is this okay? They sit around and share negative opinions about specific employees without any shame. Word gets around fast and now nobody trusts anyone and everyone is scared of being next. That's not leadership. That's bullying, plain and simple.
Getting out since their stock options aren't worth sh-t, I guess? I'm sure they will be replaced by external hires with no industry experience who live nowhere near a Medtronic facility!
You'd think the board would wake up to what a problem Geoff is. The stock is in the 70s!
I have watched leaders with authority lose the confidence of their teams because they lack emotional intelligence. Connect first and then lead.
You have to understand that leadership rolls at Verizon are often essentially glorified IC positions. It’s a remnant of all the mergers and acquisitions that formed Verizon. There is not enough pay growth in actual IC positions here. There are not enough band 5 level IC positions. So IC’s take manager rolls simply because there are more of them. Then they get those rolls because of their performance or relationship’s established while being a decent IC. So the lack of quality people leaders is to be expected. The reality is you could collapse Senior Manager, Associate Director into one roll across the company and not miss a beat. I suspect you could even collapse Director into that single roll with little impact depending on the business unit.
Bumped from @aq+1kr3jr1wf.
Nike's turnaround effort has not been a quick pivot, to borrow a basketball term. It has been more like a wobbly slide on a dusty gym floor. The stock price peaked at over $170 in late 2021. It was down to $79 in October 2024, when company lifer Elliott Hill returned from retirement to take over and set things right. Now it is $46, a price investors could have paid nearly a dozen years ago.
There are two more problems. First, although shares are cheaper than they were, they are not trading at a deep and obvious discount, at 24 times projected earnings for the company's fiscal year ending May 2027. A bounceback in earnings would help, but estimates for the years ahead have been slipping.
Second, Hill is already doing the things investors are demanding: refocusing the company on performance shoes after years of shuffling along on casual designs, and repairing relationships with stores after an arrogant move online. There are pockets of success, like a modest rebound in North American sales in the latest quarter. But it has not been enough.
It is a tempting buy when one of history's great growth stocks has fallen so much. A 3.6% dividend is a sweetener. But investors should first consider the possibility that Nike's problems run deeper than they appear.
A plunge in demand from China is clearly a key concern, but there are also questions over whether Nike has lost its marketing edge, amid what might be a shift in the phenomenon that brought it to dominance to begin with: basketball stardom. It may be wise to wait for more progress before buying shares.
## Shoe Drop
An investor who held Nike from the start would have no regrets. Shares sold for 18 cents apiece, split-adjusted, at the initial public offering in 1980. But the price had dropped to 12 cents by Oct. 26, 1984. That was the day Nike gambled a then-unheard-of $2.5 million on a five-year shoe deal with a college basketball star who had not yet played a day in the pros: Michael Jordan. The pact was so transformative that Ben Affleck made a 2023 movie about the executive who landed it, called Air, starring Matt Damon.
It was not just that Jordan won six championships with the Chicago Bulls in the 1990s, or thrilled fans with soaring dunks. The 1990s were the twilight of monoculture, when consumers watched the same television shows and read the same magazines, before the internet splintered audiences.
The 1992 Olympic "Dream Team" showed Jordan off to an adoring world. In marketing, there is a proprietary measure of celebrity reach and popularity called the Q Score. Anything over 20 is excellent, and 40 is a rare pop miracle. In the 1990s, Pope John Paul II, a celebrity pontiff if ever there was one, is said to have scored in the low-to-mid 40s. Jordan hit 56. Everyone knew him, and everyone liked him. He made Nike the place to be for top athletes.
In Nike's fiscal year ended May 2025, its Jordan brand did $7.3 billion in sales, or 15% of the company's total. But that dollar figure was down a painful 16% from the year before.
For years, the brand generated hype through limited releases and instant sellouts of retro shoes, which "sneakerheads" traded on secondary markets. During the pandemic, Nike flooded the market, creating an easy boost for sales and profits, but also suffocating its hard-won hype.
Two disastrous things happened around the same time. Nike's Consumer Direct Acceleration strategy under previous CEO John Donahoe involved cutting ties with middling shoe retailers and reducing allocations to longtime partner Foot Locker, while pitching more shoes online for a higher cut of profits. Meanwhile, consumer preference abruptly shifted away from bulky basketball silhouettes toward running aesthetics, especially dad shoes and tech wear. New Balance, Hoka, and On surged, and stores that had been spurned by Nike were happy to give them shelf space.
## The Skeptic
If there is a measure beyond Nike's stock price that captures its slump, it might be operating margin, which averaged around 13% over the decade through May 2024, and is projected to dip below 6% for the year through May 2026.
Part of the decline is necessary medicine. CEO Hill has pulled back on Jordan retro models, along with an oversaturated basketball low-top turned lifestyle shoe called Dunks. He is also making amends with retailers, which has involved accepting humbler economics. The bull case on Nike - less than half of Wall Street analysts say to buy the stock today, versus more than three-quarters at its 2021 peak - is that margins will revert to normal once Nike regains its footing.
Jay Sole at UBS is not so sure. For one thing, double-digit margins for sneaker giants are unusual. Adidas (ADS) had an 8% margin last year, and it led Puma (PUM) and Under Armour (UA). Also, it is unclear how much Nike needs to shrink to grow. Sportswear, including apparel, has recently been half of sales, Sole reckons, even though the company once said it should never be more than 30%. This risks spending down brand equity that was built with performance shoes, and cultivating a customer base of trend chasers, not brand loyalists.
Stepping back, Sole wonders whether Nike has lost what he calls its superpower: the ability to be all things to all people. "Most brands have some sort of limitation," he says. "They are footwear only or they are apparel only, or they are one country only, or they are one sport only, because that is sort of what they are known as. And it is hard to be more than that."
Lululemon Athletica (LULU, +2.90%), for example, attracts primarily women, and Under Armour attracts primarily men. In past UBS surveys that asked respondents which brands are for them, most topped out at 60%, but Nike hit 95%. It sells to men, women, young, old, suburban, urban, and participants in just about every sport, or no sports.