Reebok to Lay Off 150 Employees Ahead of Sale to Authentic Brands Group
Weeks ahead of the closing of its sale to Authentic Brands Group, Reebok is preparing to lay off employees.
The Boston, Massachusetts-based sportswear brand confirmed to FN that it will lay off 150 people in Q1 of 2022 when the sale to ABG is made official. Adidas, which owned Reebok since 2006, entered into a deal to sell the sportswear brand to retail marketing powerhouse ABG in August in a mostly cash deal worth €2.1 billion, or about $2.5 billion at current exchange. The deal is set to close in Q1.
Reebok employs 4,000 people across the globe, with 450 people in its Boston headquarters. The majority of people impacted by the layoffs work in Boston, Reebok confirmed. Even after the acquisition is completed, Reebok HQ will remain in Boston, the brand confirmed.
The layoffs were first reported by the Boston Globe, which referenced an internal zoom call on Jan. 19 and an email sent to employees from Reebok president Matt O’Toole which discussed the layoffs.
“It goes without saying that today has been a tough day,” O’Toole reportedly wrote in an e-mail to employees. “And knowing this day was coming does not make the reality of it any easier.”
He added that the layoffs will help support an “entirely different operating model” under ABG.
ABG did not immediately return FN’s request for comment.
As the Reebok sale completion date nears, certain details of the footwear brand’s trajectory have already come to light, with plans for new licensing partnerships, evolved design strategies and aggressive retail sales targets.
Under ABG, CEO Jamie Salter said Reebok will see global retail sales of more than $5 billion in 2022. In the next five years, the goal is to hit $10 billion in annual retail sales globally. ABG also plans to grow Reebok’s digital business, as well as lean into the footwear and apparel designs that have made Reebok unique.
In explaining his product and leadership strategy for Reebok, Salter that the plan was to allow employees to lean into designs that they couldn’t fully explore under Adidas’ leadership.
“We basically said to the employees: show us what you want to do, tell us what you want to do,” Salter said regarding his approach to design and product at Reebok in an interview with FN. “It’s going to be sort of a bonanza.”
To build up the brand, Salter is working alongside ABG president and CMO Nick Woodhouse, as well as former NBA star Shaquille O’Neal (the second-largest individual shareholder of the company behind dozens of brand and retailer acquisitions, including Forever 21, Barneys New York and JCPenney). O’Neal previously launched a series of sneakers with Reebok, including the popular Reebok Shaq Attaq. When he joined ABG, O’Neal became a crucial part of helping push the company through the acquisition process. Under ABG, Reebok plans to bring back some of O’Neal’s classic shoes.
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