Thread regarding Nike Inc. layoffs

@hb

Nice classic divergence tactic.

Since you seemed to miss it, I was NOT comparing a corporate office job in the U.S. to a factory job in a developing nation. I was comparing the treatment and lifestyle of a corporate office employee in the U.S. to a corporate office employee in Europe.

Now that that is clear you can make an argument why it’s so much better to work and live in the U.S. than in Europe, although you might have a different perspective once you are laid off and your job is outsourced to one of those developing countries, and you see first hand how little safety net the U.S. offers (unemployment insurance, no universal healthcare).

@fk Ignoring the fact that most productivity growth is coming from countries that treat their workers far far worse than the US does. Spend a day working in a Chinese or India factory and tell me how badly you were treated in the US.

Y’all need to go touch grass. Or find something productive to do. Both of you.

The lack of decorum and thoughtful intellectual debate here directly correlates to the downfall.

Good luck at your next company.

@ep, I love the way you just invented out of thin air a scenario where Nike goes from spending $1B on severance to $8.4B, and then proceeded to call YOUR OWN completely invented, fictional scenario “id--tic”.

With that, what you gave us is a logical fallacy referred to as “knocking down a straw man”. And it’s just one of the anticipated reasons I asked you to please not insult everyone with a third post. Yet you persist, as if you’re completely oblivious to any notion that you come across as a foolish and not particularly astute person.

You’re also still completely ignoring the fact that Nike’s severance has NOTHING to do with anyone being “owed” anything. It has already been explained to you, twice, why Nike pays the amount of severance it does. I can keep explaining that to you, but I can’t understand it for you.

Finally, I’d like to be able to say people of your ilk make this site entertaining, except that isn’t the case. Instead, people like you only confirm that some time ago Nike stopped hiring people of above-average intellect. Which isn’t an entertaining thought at all.

If you’re now going to again insult everyone with a fourth post, can I ask a favor? Since you’ve now made this same 3rd grade mistake twice (which means it isn’t a “mistake” at all but rather evidence of ignorance), before posting again will you please learn the difference between the non-interchangeable words “your” and “you’re”? One of those words denotes possession. The other is a contraction of “you are”.

Given everything you’ve written here, I suppose exactly no one should be surprised that in addition to not understanding basic business principles around termination pay, you also don’t understand the most basic of English language precepts around insanely complex words like “your”.

In that regard, maybe you SHOULD keep posting. I’ll admit, there is some comedic value in watching a person continuously demonstrate Dunning-Kruger Syndrome while being completely oblivious to any notion he’s doing exactly that. Good stuff!!

Not to get all doom and gloom (a lot of that is in the air already) but given the heavy cuts to the Distribution Center staff, Air MI and Retail teams from this year and last year I would not be using the total workforce population as the baseline for what percentage the 4,000 - 5,000 headcount cuts will be made from. So...that means a higher percentage of cuts are going to be in corporate and thus it's not unfathomable to use 20% - 25% as a possible metric (if you're on the corporate side). We've seen plenty of headlines of companies making massive cuts to their workforces in the last 4 years at unprecedented percentages e.g. 50% so I wouldn't automatically dismiss the possibility that Nike will be in the 20s for corporate.

@ep

Perhaps that is why American companies are losing their competitive advantage. People are treated like commodities, not assets. Experience is a liability, not something valued.

Europeans have it right with socialist policies. They may never be rich but are a lot more happy and realize that there is more to life than grinding away at work to make someone else wealthy.

@dz your completely ignoring the fact that Nike needs to rebuild its business. Spending the 8.4 billion in cash on hand on severance for people who will no longer work here is id--tic. The company owes you zero. They already paid you for years you worked. You may be right about the company paying large severance packages but if they do it will be another bad management decision. You may not have realized it yet but the corporate world is changing. Employees are now commodities not assets. Why do you think Nike is moving so much work to Asia...it's cheaper. Experience and knowledge aren't valued like they were in the past. The longer you are at a company the more expensive you get to be which makes you a liability aka a layoff target. Btw, it is really easy to pull your chain and set you off. People like you make this site entertaining.

Oh boy, @cg. Your attempt to save face will go about as well as your original quixotic post.

First, what does it even mean that “$1B is not exceptional in terms of layoff budgets”? How many people? What is the average payout per employee? What industry? What geography? By itself your statement is kind of meaningless, isn’t it?

Nike will likely layoff no more than 5% of its staff. But let’s say it’s a humongous 7%. That’s 5,250 employees. With the disclosed charge that’s almost $200,000 per employee. Or more than 4x the average for Fortune 500 companies. You know, according to that research you told me to do. Which further means it appears YOU need to do some research rather than making stuff up and then telling people “Go research it!”

Second, there is a direct nexus between severance amounts and wrongful termination lawsuits. It’s been known since the 1980’s that higher severance results in fewer lawsuits. This is because higher severance (i) reduces an employee’s financial incentive to pursue costly and uncertain litigation; (ii) the higher sum makes the termination feel more fair; and (iii) since severance is conditioned on a release of claims its acceptance - via higher sums - reduces litigation risks. Higher severance is primarily used to reduce litigation risks. Whether or not you believe that is completely irrelevant to the fact it’s true.

Third, your argument - inasmuch as you have one - is based on the notion that although Nike has always paid above-average severance, including as recently as 2026, they’re suddenly going to change course. That doesn’t even sound correct because it isn’t.

You earlier mentioned that Nike needs to reduce severance to preserve cash. Uh…wut? Nike is currently sitting on $8.4B in cash that is returning 5% annually, and also generates nearly $3B in free cash flow every year that can be used however the company decides. Moreover Nike just increased its dividend. Neither of those facts are indicative of a company that is particularly worried about its cash position. Yet you seem to think a $1B cash charge against that backdrop means Nike needs to be “frugal with the cash they have” vis-a-vis layoffs?? You didn’t actually think about that, did you? It just came out of your keyboard and you thought, “Sounds good to me!”

Please, just stop. Your first post didn’t go over well and your second post is even worse. Please don’t insult us with a third.

Severance has been predetermined. For legal reasons it is easier to keep a fixed table. Reduces exposure.

Don’t forget about PTO payout. You’re a fool if you take any at this point. Hoard it. Even if it puts you in a gray area. Retroactively cancel PTO you’ve already taken it, and can make a case you worked those days. Do not take PTO this holiday season. Don’t work either… just don’t record PTO.

Also, most rounds came with compensation from date of notice for a period of time. 4-6 weeks is what has been reported.

I'm somewhere between @c9 and @cg. Both make good arguments.

The ONE thing I will say is things have absolutely gotten drastic with the stock price plunge and sales down especially China which was typically a good growth market.

So desperate times and all, perhaps severance terms will be affected. Not 100% chance, not even 50% chance. But still a chance.

@c9 $1 billion is not exceptional in terms of layoff budgets. Do some research. Wrongful termination lawsuits are difficult in the US. It is an at will employment model. You can quit when you want and they can let you go when they want. There are exceptions but they would be really hard to prove. Nike isn't the company it used to be so I wouldn't count on it to act like it has in the past. The world of corporate employment is changing fast and I doubt that Nike will be an exception. If Nike was still an exceptional company they wouldn't be having the problems they are having now.

If it looks like I’m suggesting some people may be delusional…it’s because that’s exactly what I’m suggesting.

One of the most important reasons Nike severance is generous - and will remain so - is based on a cold but practical consideration: there is a direct causal link between amount of severance provided and subsequent employee legal claims for wrongful termination.

Nike provides above-average severance not because they’re “good guys”, but because generous severance substantially reduces legal liability.

Suggesting that Nike will instead look around at what other companies are doing is silly. Nike has NEVER based its severance on what other companies are doing and they aren’t going to start now. Aside from that, Nike has already revealed it plans on spending close to $1,000,000,000 on separation costs. That huge sum doesn’t at all jibe with any narrative that Nike is suddenly going to reduce the amount of severance is has been paying as recently as a few months ago.

If it looks like I’m suggesting some people may not know what they’re talking about…it’s because that’s exactly what I’m suggesting.

Severance amount is going to be based upon your band level and also years of service. Then you fall into different groupings for that. I will say that the severance package was pretty generous when I was laid off last February. In addition to severance they give you a good amount of time of Nike paid cobra coverage for health insurance vision, insurance, and dental. Additionally, there are services that you can use for out placement, also an agency that helps you look into private pay insurance and stuff like that.

Severance has not been decided. So keep speculating and it will help your mental health.

I wouldn't count on historical data to much. Revenues and net income are declining, inventory is going up, and demand is weak. They are going to be frugal with the cash they have on hand. They will look at market severance trends and those have been declining. If you want to read about bad severance packages go to the Oracle thread on this site. A really big factor is how much cobra they provide. Healthcare costs are ridiculously high. Depending on the size of your family you could end up paying $1500-3000+ a month for equivalent coverage. If you think you are going to lose your job start your job search now.

LLM output quality is largely based on the quality of questions it is asked. Go back and ask the LLM how Nike's current financial and business environment as well as current corporate trends for severance from large corporations might impact the actual severance packages for this round of layoffs. You will likely get a different answer than what you posted.