Nike is set to lay off approximately 2% of its workforce, equivalent to nearly 1,700 employees, as part of its efforts to reduce costs by up to $2 billion.
A spokesperson for Nike stated, “The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities.”
The company expressed gratitude for the contributions of all its employees despite the impact on a small portion of its workforce.
As of May 31, 2023, Nike employed around 83,700 individuals globally, according to its latest annual report.
The decision to cut costs follows a downward revision of revenue forecasts in December and a recognition of changing consumer behaviors, with individuals prioritizing essentials and experiences over discretionary purchases like expensive sneakers and athletic wear.
Additionally, Nike faces stiff competition from emerging brands like Hoka and On Cloud.
Nike’s financial outlook reflects concerns over cautious consumer behavior worldwide, compounded by macroeconomic challenges in China and Europe.
China, the second-largest economy globally, grapples with subdued consumer sentiment, a real estate downturn, and weakened exports.
Similarly, Europe narrowly avoided recession in the final quarter of 2023, with Germany experiencing its first economic contraction since the onset of the Covid-19 pandemic.
Source-CNN
