After posting weaker profits this year, sportswear giant Nike has said it will cut more than 1,600 jobs, or 2 per cent of its total workforce, in order to save costs. Nike’s global peers Adidas, Puma, and JD Sports have also warned of weaker earnings this year, as consumers cut back on non-essential spending.
In December, Nike had outlined a $2 billion savings plan over the next three years through steps including tightening the supply of some products, improving its supply chain, reducing management layers and increasing the use of automation.
The company had also announced that it would incur about $400 million to $450 million in employee severance costs in the third quarter.
Nike had approximately 83,700 employees as of May 31, 2023, according to a company filing.
The Wall Street Journal, which first reported the news, said the cuts were expected to start on Friday, and a second phase would be completed by the end of the current quarter.
The layoffs are not expected to impact employees in stores and distribution centers or those in its innovation team, the report added.
According to the latest data on layoffs.fyi, 154 companies have laid off 39,496 employees so far in 2024.
Meanwhile, official data on Wednesday showed Britain’s economy entered a recession in the second half of 2023 after it shrank by a worse-than-expected 0.3 per cent in the three months to December having also contracted by 0.1 per cent between July and September. The Bank of England has said it expects the economy to pick up in 2024.
(With Inputs From Agencies)
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