Nike Announces Job Cuts, Aiming to Trim Costs by $2 Billion
Nike is set to reduce its workforce by approximately 2%, or close to 1,700 employees, as part of its cost-cutting strategy aimed at slashing up to $2 billion in expenses.
A spokesperson for Nike confirmed the layoffs on Friday, stating, “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 affected by the decision.
As of May 31, 2023, Nike had approximately 83,700 employees worldwide, according to its latest annual report.
The move comes after Nike revised down its revenue forecast in December and announced plans for cost reductions amidst concerns over shifting consumer spending habits. The company cited a preference for essentials and experiences over discretionary purchases like high-end sneakers and athletic wear.
In addition to changing consumer behavior, Nike faces stiff competition from emerging brands such as Hoka and On Cloud.
Nike’s financial outlook reflects cautious consumer behavior globally, as well as macroeconomic challenges in key markets like China and Europe. China grapples with subdued consumer sentiment, a real estate downturn, and weakened exports, while Europe narrowly avoided recession in the last quarter of 2023, with Germany experiencing its first economic contraction since the onset of the Covid-19 pandemic.
