What we can learn from Nike’s sustainability layoffs

Business as usual is not the answer

Let’s have a quick business lesson. 

There are two numbers you need to think about when you’re running a business — there’s the revenue and the expenses. For the sake of simplicity, let’s call them the good number and the bad number. Success is based on keeping the good number up and the bad one down, and people who do this (marketing people, sales people, logistics people) are very important to the companies they work for.

Success is not based on how nice you are to the planet. Slashing your carbon emissions does not impact the important numbers in a positive way, and a lot of the time it does the opposite. This doesn’t stop companies from working on sustainability projects, but they are always going to be confined by the financials. You can see this playing out in a recent report from ProPublica, looking at how Nike made drastic cuts to its sustainability teams during a recent round of layoffs.

Nike is having a difficult time at the moment — newcomers like Hoka and On are thriving in the mass-market lifestyle space, while New Balance, Asics and Salomon are doing the same in the cool-people space. Nike’s stock price has lost almost a third of its value this year, hence the layoffs. According to ProPublica, the brand was aiming to cut its overall headcount by 2% globally, but laid off around 20% of the people who were working “primarily” on sustainability projects, with another 10% leaving voluntarily or transferring to other teams internally.

According to the report, Nike eliminated its Sustainable Innovation team in December over a zoom call that lasted less than ten minutes. ProPublica also speculates that around 50% of the people involved in Nike’s carbon target planning were “laid off or transferred to non-sustainability jobs." We can assume that Nike is not firing 20% of the people responsible for making sales go up or expenses go down.