Adidas Plans Job Cuts Affecting 500 Employees Despite Record Profits
In a surprising turn of events, Adidas, the renowned sportswear giant, has announced plans to reduce its workforce by 500 positions at its headquarters in Herzogenaurach. This decision comes on the heels of the company reporting one of its most successful quarters in recent history.
The German economy is currently facing significant challenges, including the ongoing green transformation, rising energy costs, and the exit of the baby boomer generation from the workforce. As a result, the Federal Employment Agency has predicted a peak in unemployment rates, with numerous companies, including electronics manufacturers and traditional machinery producers, announcing layoffs in recent weeks.
Despite Adidas's impressive financial performance, which included a 19% increase in currency-adjusted sales and a 24% rise in total revenue to approximately EUR5.97 billion in the last quarter of 2024, the company is moving forward with its job reduction plan. During a recent town hall meeting, executives communicated the impending layoffs to employees, stating that the current organizational structure is too complex for the rapidly changing business environment.
According to industry sources, this restructuring may signal a broader transformation within Adidas. While the company has not confirmed the exact number of layoffs, it has acknowledged the need to adapt its corporate structures to reflect modern working realities. Approximately 5,800 employees are currently employed at the Herzogenaurach location, and those affected will have the option to participate in a voluntary severance program that offers financial compensation upon departure. A social plan for impacted workers is also under consideration.
Adidas's CEO expressed satisfaction with the company's recent performance, highlighting the robust growth across various regions and product categories. The company has seen increased consumer interest in both lifestyle and performance products, suggesting a strong market position despite the upcoming workforce reductions.
Founded in 1924 by Adi Dassler and his brother, Adidas has a rich history in the sports industry. The company formally adopted the name Adidas in 1949, following the registration of its iconic three-stripe logo. As the company navigates this challenging period, the focus on maintaining its competitive edge in the global market remains paramount.
