Restructuring Aims to Streamline Business
Adidas plans to lay off up to 500 employees at its headquarters in Herzogenaurach, Germany, as part of an effort to simplify its operations, a source confirmed to CNBC on Thursday. The job cuts could impact nearly 9% of the 5,800 staff at its global headquarters.
Layoff Details and Employee Notification
The final number of affected employees has not yet been determined, but Adidas will make a decision as the process progresses, according to a source familiar with the matter. Employees learned about the planned restructuring on Wednesday, just one day after Adidas announced better-than-expected preliminary profit results for its holiday quarter.
Financial Performance and Growth
Adidas reported 19% sales growth in the last quarter of 2024, with revenue expected to reach 5.97 billion euros, surpassing analyst estimates of 5.68 billion euros, according to LSEG data. The strong results reflect the company’s efforts to restructure and capitalize on growing demand for its classic sneaker lines.
Statement from Adidas
In a statement to CNBC, an Adidas spokesperson explained that the company’s current operating model has become too complex, prompting the decision to reassess its organizational structure.
“To set Adidas up for long-term success, we are now starting to look at how we align our operating model with the reality of how we work,” the spokesperson said. “This may have an impact on the organizational structure and number of roles based at our HQ in Herzogenaurach.”
Adidas will collaborate with the Works Council to ensure that any job cuts are handled with respect and care for employees.
Not a Cost-Cutting Move
The spokesperson emphasized that the layoffs are not part of a cost-cutting program, but rather an adjustment to reflect how the company has evolved in recent years. Adidas has been undergoing restructuring while seeing strong sales momentum, particularly in its Samba and Gazelle sneaker lines, which have outperformed expectations.
Adidas’ Competitive Position
Adidas has benefited from a slowdown at its biggest competitor, Nike, allowing it to gain market share. The company’s restructuring efforts and product strategy have helped it close 2024 on a high note, reinforcing its competitive position in the sportswear market.
