Cultural Blindness at Nike Results in Major Layoffs Amidst Woke Backlash

Just over a month ago, we saw one of the worst corporate disasters in history when Anheuser-Busch launched a promotion with trans-influencer Dylan Mulvaney. This led to the largest brand drop in the beer industry and corporate world. However, another global company made the same mistake without causing the same level of public outrage.

Nike should be thankful that Mulvaney’s involvement in the Mulvaney case was not completely ignored, but was certainly overshadowed by the backlash against beer. The downfall of the beer was the focus of news coverage for many months. Nike, however, wasn’t left untouched. The brand was also criticized, but the outrage wasn’t as loud. It is because the company was caught up in the virtue-signaling craze, but they fell victim to their shortsightedness.

The company may be so monolithic, it can weather economic challenges and move on. Right now, it’s experiencing bad weather.

A significant portion of the workforce is being laid off by a clothing company that is experiencing enough difficulties. The apparel company is in the process of laying off 1,600 jobs to reduce operating costs by $2 billion. It is not a small culling as it represents 2 percent of Nike’s worldwide workforce. It is not possible to say that this is all because of the Mulvaney partnership. But when faced with headwinds, how prudent is it to go into controversial arenas?

It is admirable that companies want to expand their customer base, but how they do it is a problem. It is not the issue that a company will say, “We want to include all segments.” When companies are in trouble, it is because of the hype and marketing techniques that favor certain groups at the expense of others. Mulvaney and other activist influencers have caused two major problems.

First, you are targeting a small segment of the market. However, the hype and advertising far exceed that audience. The imbalance will eventually cause you to lose a market segment much larger than the gains that you hoped for. You need to target a niche market with targeted advertising, not a general campaign on social media.

Bud Light has been advertising to the LGBT community for many years, but in ways that are appealing to this market: sponsorship of specific events, bar-branded merchandise, etc. Mulvaney would have worked well in this role, with little backlash. The partnership was taken to a national scale, which is where the lines were crossed and customers lost.

Second, you may want to dismiss your current customers as a way of virtue signaling. I said that the use of Mulvaney wasn’t the biggest problem for the brewery, but that it was the exposure of Allisa Heinerscheid as the Vice President who lectured her brand drinkers to grow up and evolve to accept this platform. Gillette fell into the same trap when it tried to appeal to a woke market by having a feminist and activist advertising agency create a commercial that bemoaned toxic masculinity. Gillette launched a lecture-style ad campaign that insulted its core audience and lost billions in sales.

Nike may not have suffered as much, but it has still missed the signals on the market. Consider the contradiction of hearing for years that advertising sets unrealistic goals for women and then saying a biological man is a female archetype. The original complaint was that we needed to show real women. But the pendulum has now swung to the point where we have to celebrate an unreal woman.

Nike failed to gauge the public’s reaction. This is not just about using a controversial figure such as Dylan Mulvaney. It also applies to the sporting market Nike occupies. Trans athletes are not welcome in women’s sports, according to public polls. A growing number of sports governing bodies have also taken a position on this issue. Trans athletes are a divisive topic, even though the media is reluctant to acknowledge it.

Nike fell into the same trap as the press, which is to believe their hype. The press continues to support trans athletes because they only hear positive reports about the issue. Nike bought into this hype, and because it only heard positive words about the issue (partly due to its location in the liberal Pacific Northwest enclave), pushing this agenda was a natural choice for the company.

It was a case of not believing the national polls because they only listened to favorable responses from select sources. The national polls were not accurate because only a few sources gave positive responses. This is another lesson in business.