Nike is cutting about 1,700 jobs

(CNN) — Nike plans to lay off about 2% of its employees, or about 1,700 people, as the sportswear giant seeks to save up to $2 billion in costs.

“The actions we are taking put us in a position to right-size our organization to capitalize on our greatest growth opportunities,” a Nike spokesperson said in a statement on Friday. “Although these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all of our Nike teammates.”

According to its latest annual report, as of May 31, 2023, the company employed approximately 83,700 people worldwide.

In December, Nike lowered its revenue forecast and announced cost cuts amid growing concerns that consumers around the world were slowing their spending. The company said it is looking to save up to $2 billion over the next three years.

Customers are changing their behaviour, moving away from discretionary purchases of goods (such as expensive sneakers and sportswear) and towards essential items and experiences such as concerts and trips.

Nike also faces stiff competition from emerging brands like Hoka and On Cloud.

Reporting its latest financial results in December, Nike's chief financial officer, Matt Friend, said its bleak outlook reflected “signs of more cautious consumer behavior around the world” and also pointed to “increasing macroeconomic headwinds in China” and Europe.

China, the world's second-largest economy, faces enormous challenges, ranging from pessimistic consumers to stagnant real estate and weak exports.

Meanwhile, Europe narrowly avoided a recession in the last three months of 2023, with its economy stagnating, official data confirmed on Wednesday. Germany, the region's largest economy, contracted last year for the first time since the start of the Covid-19 pandemic.

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Nathaniel Myerson contributed to this article.

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