Adidas has announced plans to cut up to 500 jobs at its headquarters in Herzogenaurach, Germany.
This decision comes despite the company posting better-than-expected profits for the holiday quarter of 2024.
The layoffs are part of a broader strategy to decentralize the company and adapt to the rapidly changing business environment.
Adidas: Job Cuts and Restructuring
Adidas currently employs around 5,800 people at its German headquarters.
The company’s CEO, Bjorn Gulden, has stated that the current operating model is too complex and needs to be simplified.
The layoffs will affect nearly 9% of the workforce at the headquarters. Gulden emphasized that the restructuring is not a cost-cutting measure but a necessary step to align the company’s operations with its evolving business model.
Despite the impending job cuts, Adidas reported impressive financial results for 2024.
The company saw an 11% increase in sales and an operating profit of €1.34 billion, surpassing analysts’ expectations.
The strong performance was driven by the success of classic shoe styles like the Samba and Gazelle, as well as a slowdown at its biggest competitor, Nike.
Puma’s Cost-Cutting Measures
In a similar vein, Adidas’s rival, Puma, has also announced a cost-cutting program following a decline in net profit for 2024.
Puma’s net profit fell to €282 million from €305 million in 2023 due to higher interest payments and non-controlling interests.
The company aims to improve its EBIT margin to 8.5% by 2027. Puma’s CEO, Arne Freundt, stated that while the company achieved solid sales growth, it was not satisfied with its profitability levels.
Puma plans to achieve its cost-cutting goals by focusing on areas like personal expenses, although it has no global target for layoffs and aims to keep its workforce stable.
Freundt expressed optimism about stronger growth in 2025 and emphasized the importance of addressing profitability while continuing to invest in strategic projects.
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