On Thursday, Nike (NKE.N) announced that it will cut approximately 2% of its total workforce, or more than 1,600 jobs. This decision comes as the sportswear giant seeks to reduce costs after reporting lower profits this year.
Nike’s global rivals, including Adidas, Puma (PUMG.DE), and JD Sports (JD.L), have all warned of lower earnings this year. Additionally, consumers are cutting back on non-essential spending.
In December, Nike announced a $2 billion savings plan for the next three years. This plan includes tightening the supply of some products, improving its supply chain, reducing management layers, and increasing the use of automation.
Additionally, the company announced employee severance costs of $400 million to $450 million in the third quarter.
As of May 31, 2023, Nike employed about 83,700 people, as stated in a company filing.
The Wall Street Journal, which first reported the news, indicated that the cuts are expected to begin on Friday. Furthermore, a second phase is anticipated to be completed by the end of the current quarter.
The report suggests that the layoffs are unlikely to impact employees in stores, distribution centers, and the company’s innovation team.
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