No mass redundancies at Nike, 155 weekend shift workers offered alternative

A week ago, it emerged a special works council would be held at Nike today. A restructuring with job losses was feared, but that has now not materialised.

Cuts will be made to the weekend shift, which employs some 600 workers. 155 employees will be offered alternative shifts.

The company says that there is too little work during the weekends, when labour is more expensive. What the different options are for the weekend shift workers is not known.

Problems at Nike

According to retail expert and marketing professor Gino Van Ossel of the Vlerick Business School, dark clouds have been hanging over the distribution centre in Laakdal for some time. ‘It started with a strategy involving selling much more direct sales to consumers,’ he says.

‘That meant much less through multi-brand stores. Strict requirements were introduced on such stores and that meant saying goodbye to a lot of chain stores. As a result, sales fell.

According to Van Ossel, Nike then encountered a second problem. ‘For too long they stuck to their classic trainer model while new, more trendy brands emerged. The distribution centre is obviously not the cause of that but possibly shares in the blows.’

Because of these ‘strategic mistakes’, Nike created overproduction, Prof Van Ossel says. The company makes goods that it cannot sell. ‘The consequences are felt in a distribution centre, because all goods sold in Europe pass through there. If volumes drop, you get overcapacity and there is only a spectrum of decisions that can be taken."

‘It is a matter of adjusting capacity to smaller demand and hoping that demand will increase again in time. Nike is also working on that,’ Prof Van Ossel concludes.