Nike has announced plans to reduce its total workforce by approximately 2%, amounting to over 1,600 jobs, in response to weaker profits this year, as the sportswear titan aims to trim expenses.
Nike’s global counterparts including Adidas, Puma, and JD Sports have also cautioned about weaker earnings for the year, attributing it to consumers scaling back on non-essential expenditures.
In December, Nike outlined a $2 billion savings plan to be implemented over the next three years. This plan includes measures such as tightening product supply, enhancing the supply chain, streamlining management structures, and boosting automation usage.
Continue Exploring: Nike adapts to shifting market dynamics: Yearly sales outlook revised, shares drop 11%
The company also disclosed plans to allocate approximately $400 million to $450 million for employee severance costs in the third quarter.
According to a company filing, Nike had around 83,700 employees as of May 31, 2023.
According to a report by The Wall Street Journal, the cuts were set to begin on Friday, with a second phase scheduled for completion by the end of the current quarter.
The layoffs are anticipated not to affect employees working in stores and distribution centers, nor those within its innovation team, as stated in the report.
Continue Exploring: Nike faces threat as discounted sneakers double in 2024, challenging traditionally robust pricing strategy amidst intense competition