In this article, Adidas plans to cut as many as 500 jobs in a bid to simplify its business, as confirmed by a source to CNBC on Thursday. The job cuts will impact employees at Adidas’ headquarters in Herzogenaurach, Germany, which represents nearly 9% of the 5,800 staff at that location. The exact number of job cuts has not been finalized, but up to 500 positions could be affected, according to a source. The final number of job cuts will be determined as Adidas progresses further in the process.
Employees were informed about the layoffs on Wednesday, following Adidas’ announcement of better-than-expected preliminary profit results for the holiday quarter and a 19% sales growth. The company anticipates sales to reach 5.97 billion euros, surpassing analysts’ expectations of 5.68 billion euros, as reported by LSEG.
A spokesperson for Adidas stated to CNBC that the current operating model has become overly complex, leading to the decision to streamline operations through these job cuts. The spokesperson emphasized that the aim is to align the operating model with the company’s evolving needs for long-term success. Adidas will collaborate with the Works Council to ensure that any organizational changes are managed with respect and care for all employees.
The spokesperson clarified that the layoffs are not part of a cost-cutting initiative but rather an adjustment to adapt the business to changes that have occurred over the past few years. Adidas has been restructuring its operations and concluded 2024 with sales and profits exceeding both analysts’ and the company’s expectations. The company has leveraged its classic Samba and Gazelle styles to drive sales and has also benefited from a slowdown at Nike, its primary competitor.
