Sportswear giant Puma announced plans to cut 500 jobs worldwide, including 150 at its headquarters, as part of a drastic cost-cutting initiative following lackluster sales projections for 2025. The layoffs come as the company grapples with fierce competition from industry titans Adidas and Nike, as well as fast-emerging brands like On Running and Hoka. The announcement, made on March 12, 2025, underscores broader economic challenges, including a faltering U.S. economy and a dipping share market, which are exacerbating Puma’s woes.
The job cuts are part of a broader strategy to shore up profitability after disappointing financial performance. Puma also revealed plans to shutter unprofitable stores globally, aiming to streamline operations and redirect resources. The company has set an ambitious target to boost its EBIT (earnings before interest and taxes) margin to 8.5% by 2027, up from 7.1% in 2024—a goal that analysts say may be tough to achieve given current market headwinds.
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Puma’s struggles mirror wider economic turbulence in the U.S., where sluggish growth, rising inflation, and reduced consumer spending have hit retailers hard. The U.S. economy, a key market for Puma, has seen weaker-than-expected job reports and declining retail sales, putting pressure on brands reliant on discretionary purchases like athletic wear. Meanwhile, the share market has taken a hit, with stocks dipping as investor confidence wavers amid fears of a looming recession. Puma’s stock is likely to feel the ripple effects as the company navigates this rocky terrain.
Once a darling of the sportswear world, Puma now faces an uphill battle to reclaim its edge. Industry watchers are keen to see if these cost-cutting measures will stabilize the brand—or if they signal deeper troubles ahead in a fiercely competitive and economically strained landscape.
Key Points:
- Job Cuts: Puma will eliminate 500 jobs globally, including 150 at its headquarters, as part of a cost-cutting effort.
- Weak Sales: The layoffs follow disappointing sales forecasts for 2025, driven by competition from Adidas, Nike, On Running, and Hoka.
- Store Closures: Puma plans to close unprofitable stores worldwide to improve financial performance.
- Financial Goal: The company aims to increase its EBIT margin to 8.5% by 2027, up from 7.1% in 2024.
- U.S. Economy: A struggling U.S. economy, with slow growth, inflation, and reduced consumer spending, is impacting Puma’s key market.
- Share Market Dip: A declining stock market, fueled by recession fears, adds pressure on Puma and the retail sector.
