Following its announcement of cutting ties with Kanye West over the rapper’s recent string of antisemitic and offensive remarks, Adidas implemented a hiring freeze to deal with the financial impact of ending the Yeezy brand.
When asked whether the sportswear company would be firing workers, Adidas spokesman Rich Efrus said employees who worked on Yeezy-branded products would be reassigned.
“This is not up for discussion. We need our employees’ talent and skills within the organization,” Efrus told Forbes.
NETFLIX WON’T CANCEL KANYE WEST’S ‘JEEN-YUHS’ DOCUMENTARY
Yet Morningstar retail equity analyst David Swartz suggested Adidas’s decision could be “more severe.”
“The impact of this move will be more severe than anticipated as Adidas has ended production of all Yeezy products and ceased royalty payments,” Swartz said, estimating products associated with the Yeezy brand have the potential to earn 10%-15% more of its net income.
The decision to cut ties with West, who is now known as Ye, follows an Adidas investors third-quarter report that warns of 60% lower than expected profits.
“The company’s new outlook takes into account a further deterioration of traffic trends in Greater China as well as a significant inventory build-up as a result of lower consumer demand in major Western markets since the beginning of September,” Adidas stated.
On Tuesday, Adidas said it “does not tolerate antisemitism and any other sort of hate speech,” adding that “Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”
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The sportswear company said it would stop production of Ye’s Yeezy-branded products and all payments made to him and his companies “with immediate effect.”
