German sportswear giants Adidas and Puma are both exploring cost-cutting measures, including the possibility of job reductions, as part of their strategies to improve profitability.

Adidas announced its intention to ensure “long-term success” by reviewing its business structure and adapting it to current realities. A spokesperson confirmed that this could lead to job reductions at the company’s headquarters in Herzogenaurach, Germany, although specific details were not disclosed. The company emphasized that any changes would be implemented “with the greatest respect and care for employees.”

German news outlet Manager Magazin reported that the restructuring could potentially impact up to 500 employees, a move reflecting CEO Bjorn Gulden's goal to simplify the company.

This announcement comes as Adidas seeks to recover from recent challenges, including the fallout from its high-profile partnership with musician Kanye West, now known as Ye. Adidas had designed the Yeezy line of sneakers with West but severed ties following his anti-Semitic remarks. The company had to write off a portion of Yeezy stock and sell the remaining products at a discount.

Despite the setbacks, Adidas reported a five-fold increase in operating profits for the previous year, recovering from the 2023 crisis. However, Gulden has stated that more improvements are needed, with the company targeting profit margins of 10 percent, up from 5.6 percent last year.

Meanwhile, Puma, a smaller competitor to Adidas, also announced plans to reduce costs, including potential cuts to personnel expenses, following disappointing financial results. Puma’s shares dropped by as much as 18 percent on Thursday after its net profit for the year decreased to 282 million euros ($293 million), down from 305 million euros the previous year.

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