Puma announced plans to reduce its global workforce by 500 jobs as part of its strategic cost-cutting program. The decision follows disconcerting quarterly sales and disappointing profit forecasts unveiled earlier this year. The announcement was made on March 11, 2025, as the company prepares to tackle weak demand particularly evident within major markets like the U.S. and China.
According to CEO Arne Freundt, approximately 150 of the job cuts will take place at Puma's headquarters, impacting its administrative capacities directly. Currently, Puma employs around 21,000 people across the globe, and these layoffs represent just a small fraction—less than 3%—of its total workforce. Alongside these job cuts, the company will also shut down several unprofitable stores, aiming to streamline operations and improve financial performance.
Freundt emphasized during the press conference, "Around 150 jobs of the 500 will be cut at the Puma headquarters," reflecting the company's strategy to adapt to challenging market conditions. Alongside him, Chief Financial Officer Markus Neubrand confirmed the necessity for these measures, stating, "A low single-digit percentage of businesses are affected," addressing concerns surrounding the layoffs.
The cost-reduction strategy is pivotal as Puma strives to navigate fierce competition from established rivals like Adidas and Nike, as well as newer, nimble brands such as On Running and Hoka. This competitive pressure has compelled Puma to rethink its market positioning and operational efficiency to capture more of the booming $400 billion global sportswear market.
The backdrop to Puma's decision includes disappointing earnings recorded earlier this year. The brand's annual profits did not meet expectations, which has prompted internal reevaluation. With the forecast projecting weak demand persisting, Puma is under pressure to adjust and reinvigorate its presence within the market.
Puma's current plan includes goals for improvement; the company aims for its earnings before interest and tax (EBIT) margin to reach 8.5% by 2027, up from 7.1% achieved in 2024. By trimming its workforce and closing underperforming retail locations, Puma hopes to consolidate its operations and improve profitability substantially.
Freundt's insights underline the urgency of this strategic pivot; he affirmed, "Our focus is to bolster our brand and take larger steps toward capturing market share effectively." The cuts, alongside targeted strategic pushes, are expected to bolster the company's ability to compete and thrive amid market fluctuations.
While the decision to cut jobs is always challenging—impacting both the workforce and community—Puma’s leadership has framed this as necessary for future stability and growth. The global sportswear industry, with its quick changing dynamics and consumer trends, requires brands to remain agile and responsive, and Puma appears committed to ensuring its viability and competitive edge.
Analyzing this shift also reflects broader trends across the industry, where even well-established brands must adapt to maintaining relevance. Puma's proactive approach may serve as both a cautionary tale and exemplar for others making similar decisions as economic pressures mount.
With consumer preferences rapidly altering, showcasing effective engagement and innovation will be key for Puma, particularly as it moves to reposition itself as one of the leading sportswear brands worldwide. Observers will be closely monitoring how these cuts and the associated financial strategy impact Puma's market performance and investor confidence as 2025 progresses.