Adidas plans to cut as many as 500 jobs in a bid to simplify its business, a person familiar with the matter confirmed to CNBC on Thursday.
The layoffs will affect employees at Adidas’ headquarters in Herzogenaurach, Germany, and represent nearly 9% of the 5,800 staffers it employs at the location.
The company has not determined how many jobs it will cut, but up to 500 positions could be affected, a source told CNBC. Adidas will decide the final number when it is further along in its process.
Employees learned about the cuts on Wednesday, just one day after Adidas announced what it called better-than-expected preliminary profit results for its holiday quarter and 19% sales growth. It is expecting sales to grow to 5.97 billion euros, ahead of the 5.68 billion euros that analysts had expected ahead of the announcement, according to LSEG.
In a statement to CNBC, a spokesperson said Adidas’ current operating model has become “too complex” and the cuts are designed to simplify operations.
“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. This may have an impact on the organizational structure and number of roles based at our HQ in Herzogenaurach,” the spokesperson said. “We will now start to work closely with the Works Council to ensure that any changes are handled with the utmost respect and care of all employees.”
The layoffs are not part of a cost-cutting program, but more of an effort to adapt its business to how it has changed over the past couple of years, the spokesperson said.
Adidas has been restructuring its business and capped off 2024 on a high note with sales and profits that came in higher than analysts and the company expected.
It has leaned on its classic Samba and Gazelle styles to boost sales and has also benefited from a slowdown at Nike, its biggest competitor.