Reebok eliminates 65 jobs at Canton headquarters, 150 worldwide
Struggling Reebok International Ltd. said Tuesday it is cutting about 65 positions at the athletic apparel maker’s Canton headquarters, just under 7 percent of the workforce there, as part of a global restructuring.
Worldwide, Reebok said it will eliminate 150 jobs, including by closing its European office in Amsterdam and its Asia-Pacific office in Hong Kong.
In all, it has 8,000 employees. The layoffs come several months after Reebok’s German parent company, Adidas AG, slashed its 2015 sales forecast for Reebok from about $3.9 billion to $2.6 billion – a larger decline than some analysts expected.
Reebok faces multiple challenges, including the loss of its contract to supply National Football League apparel, and the ongoing National Hockey League lockout, though company spokesman Dan Sarro said the layoffs are not related to Reebok’s relationship with either league.
In September, the company made broad organizational changes to sharpen its focus on developing and selling fitness products, and eliminated the position of global president as part of a management shake-up.
As part of the changes unveiled Tuesday, the company said it will eliminate regional offices and charge its global team with managing worldwide business from Canton. Some workers at regional offices will transfer to the Canton headquarters, which employed about 1,000 people before Tuesday’s job cuts.
“While I am convinced Reebok will emerge a stronger organization and ultimately a more desirable brand for our fitness lifestyle consumer following today’s announcement, this is a difficult day for all of us,” Matt O’Toole, Reebok’s chief marketing officer, said in a statement.
Adidas, after taking over Reebok more than six years ago, has been unable to initiate a turnaround of the brand, whose US retail market share fell from nearly 8 percent in 2005 to 4.6 percent in 2011, according to SportsOne Source, a sporting goods industry research firm based in Charlotte, NC.
Reebok last made significant workforce reductions in 2009 when it laid off about 300 employees, including 112 in Massachusetts. At the time, Reebok employed 1,700 people in the state.
Matt Powell, an analyst at SportsOne Source, said Reebok generated about $250 million in NFL product sales last year – down from a peak of about $500 million. He estimated that NHL business is down about 50 percent because of the dispute between players and owners over revenue-sharing and other labor issues.
“That’s money they can’t replace,” Powell said. “Their business has been tough. Anytime your business isn’t good you have to pull expenses back to get in line.”
Nike won the NFL contract in 2010 by offering the league $1.1 billion over five years. Reebok paid $250 million over 10 years for the same rights. The deal took effect this season, with Nike supplying the NFL’s onfield uniforms for the first time and supplanting Reebok as the maker of officially-licensed NFL fan gear.Jenn Abelson can be reached at firstname.lastname@example.org. Follow her on Twitter @jennabelson. Callum Borchers can be reached email@example.com. Follow him on Twitter @callumborchers.