How few people do they believe Nike can function with? It seems the current strategy is just to keep cutting, but they'll have to stop at some point. Or at least I hope they will. I wouldn't be surprised if they reduced the number of employees so much that the company can't function properly anymore.
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This has absolutely nothing to do with AI, what are you talking about?
In December we shut down a mart systems, sustainability, and innovation implementation teams, none of those roles can be automated with ai.
AI is the intended go-forward plan. Whether that's feasible now is not as important as what the execs expect to be the case in 5 years. I'm not saying "Computers bad, destroy all technology!" .... But almost every so called white collar worker will be caught off guard by...
- How much AI can eventually replace what they do and...
- How prematurely our execs are willing to cut employees without having a real plan for how AI can actually be effective in the workplace.
Remeber, execs don't think about us as people with experience, wisdom and smart decisionmaking capability. Execs look at us as a function of input and output. Through that lens, they aren't expecting AI to do an A+ replacement job for what we do...they just need it to do a C+ or B- job at best.
To use an illustrative comparison, look at how the car industry has done a whiplash on electric vehicles. Hertz double downed on Teslas and now they're feeling the pain of not having thought through the strategy and having to revert back to ICE vehicles while selling off 20,000 Teslas at a major loss. This isn't a slam on Tesla (they weren't involved in that decision and I'm not sure they ever forcefully endorsed that their cars were a good rental vehicle fleet to begin with). It's just highlighting that execs aren't nearly as smart as they would like everyone else to think they are. They make decisions heavily influenced by fads and fomo more often than not.
Similarly I would hypothesize that companies like Nike are going to double down on AI and layoff way more employees than they should given a lack of strategy and competency and after they realize not everything can be effectively run by AI they'll have to hire some of those people back.
Execs are making a big bet that AI will mature fast enough that whatever short term gaps are not sufficiently covered by the technology they can just whip the remaining employees into submissive overwork since they'll all be living and working in fear of being in the latest wave of layoffs.
When is enough enough? Nike has less employees per revenue and margin dollar than any other company in the industry. Do the math.
Nike: $51.469b revenue, $5.07B net income, 83,700 total employees = $614k revenue and 60k net income per employee
Adidas: $23.34B revenue, $-0.227B net income, 57,016 employees = 409k revenue and -4K net income per employee
LuLu: $9.186B revenue, $0.855B net income, 34,000 employees = 270k revenue and $25 net income per employee
Short term profits so execs can enrich themselves before the ship goes down. It’s not about the company. It’s about them looting the place.
Profit.
To make the company stronger overall