Communications lessons from the Nike layoffs

The employee response to Nike’s exec comms around its layoffs offer reminders about how comms influences the mixternal brand.

How Nike handled its layoffs

When you think of mainstay American brands, Nike is probably close to the top of the list. Long known as an innovator in the world of sports apparel and equipment, there’s a certain air of gravitas that comes with owning an item branded with the Nike logo. But all might not be well in Nikeland, with recent layoffs, a pushback against leadership, and a rethink on internal culture prompting the iconic brand to make changes.

According to the Wall Street Journal, after Nike laid off 1,600 employees earlier this year, CEO John Donahoe said in a meeting with over 20,000 employees that he held himself accountable for the company’s recent struggles amid a pivot away from brick-and-mortar sales amid a perceived e-commerce boom that didn’t fully materialize.

Spoiler: It didn’t go over well.

“Accountability: I do not think that word means what you think it means,” an employee wrote. “If this is cost cutting, how about a CEO salary cut?” another wrote. Soon a cascade of laughing emojis filled the screen.

Some colleagues warned others that their posts weren’t anonymous and the chat might be monitored. The attacks went on for several minutes. “I hope Phil is watching and reading this,” an employee wrote, referencing the retired Nike co-founder Phil Knight.

The virtual protest illustrated the depths of the dissatisfaction within the sneaker giant and concern for its strategy. “How did we actually get here?” wrote one product manager.

This pushback from Nike’s own employees amid the rethink needed to help right the ship exposes a flash point for the organization’s operational strategy. What goes on behind closed doors in a company can greatly affect external perceptions of that same brand. But with a smart and well-executed change strategy, internal shifts can double as cultural cornerstones that drive external successes.

How internal affairs impact external perception

When the seas of change begin to make waves, it’s time for communicators to take notice and determine how to proceed with the company’s mission and values at the top of the list of priorities. At Nike, creativity has long been one of the brand’s biggest identifiers. The WSJ report claims that the company spent far too much in the way of time and resources looking back at the brand’s history of accomplishments rather than focusing on new breakthroughs. It’s no stretch to understand how that loss of creativity may well have impacted Nike’s less-than-stellar business outlook, leading to the layoffs and internal consternation.

According to Antonio Stephens, director of DE&I communications and global employer brand at Levi Strauss and Co., emphasized how these internal changes can change perceptions among not just the general marketplace, but also among potential recruits.

“Internal changes within any organization can lead to shifts in external perceptions among key stakeholders and talent prospects.”

Communicators can help serve as a stabilizing force during these times. But they need to work hand-in-hand with leadership to ensure everyone is on the same page.

“During times of change, communicators play a crucial role in proactively working with leaders to control the narrative,” continued Stephens. “This involves maintaining visibility among employees through open and transparent communication platforms, ensuring consistent messaging is cascaded effectively by change agents.”

Employee experience and brand impacts

It’s also important to consider the impact that external pressures can have on employee culture and morale within a company. Looking at the level of dissent apparent in the messages firing back at Nike’s CEO in the town hall meeting, it’s clear that some of Nike’s employees are feeling the heat.

Communicators aren’t a fix-it method for every problem a company faces, but they serve as critical advisors in avoiding moments like these. For instance, internal communicators should always be in the ear of leaders and provide counsel so they can avoid stepping on verbal landmines in front of employees and stakeholders like Donahoe did. It’s far easier to prevent culture issues internally as opposed to fixing them once the public finds out about them.

Measurement in times of change

A good communicator knows how to tell the story of the situation around them,  often through data. That’s especially critical during times of change. At Ragan’s Employee Communications and Culture Conference last week in Chicago, we learned that you can’t just assume everyone is at the same stage of understanding the story you’re trying to tell. In such moments, measurement can help you define distinct employee personas that segment the delivery channels, cadence and language your change messaging to preserve employee culture during rocky times.

In addition, if communicators can talk about the stories within their metrics in a transparent way, it can fundamentally change how other stakeholders share information both inside and outside the company. By measuring attrition metrics after a major change announcement and comparing it to qualitative data from a pulse survey, for example, a story emerges about what went wong or right and why.

Nike is still one of the most recognizable brands in the world, make no mistake. But this is a case study in the fact that no matter how big or popular your organization is, comms are still important in maintaining a positive culture internally that can then beget a positive external perception.

Sean Devlin is an editor at Ragan Communications. In his spare time he enjoys Philly sports and hosting trivia.


One Response to “Communications lessons from the Nike layoffs”

    Frank Strong says:

    It’s not the communications, but the context that’s the problem.

    Nike made more revenue on slightly less profit – but still profit – last quarter. But the numbers are huge. $1.2 billion in PROFIT on sales of $12 billion.

    And they are sitting on $25 billion in cash (all numbers come from Yahoo Finance and are publicly available).

    And that’s what companies are doing with cash – layoff and then they go and buy back shares. Nike bought back $1.2 billion in shares (according to Ycharts) just last November (2023) and then a few months later they laid off 1,600 people.

    This isn’t a PR problem. It’s a leadership and empathy problem.

PR Daily News Feed

Sign up to receive the latest articles from PR Daily directly in your inbox.