Sportswear giant Nike is set to lay off approximately 1,700 employees, accounting for about 2% of its total workforce, as part of its efforts to reduce costs by as much as $2 billion. 

The move comes as the company aims to streamline its operations and capitalize on its most significant growth opportunities.

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. 

Nike $NKE announces Layoffs for 2% of Workforce
▪️More Inventory built up than several peers
▪️Teens are choosing other Shoe Brands 👟 pic.twitter.com/y2CjXhR9mM

— Disruptor ⚡️ (@DisruptorStocks) February 16, 2024

While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”

As of May 31, 2023, Nike employed around 83,700 people worldwide, according to its latest annual report. The decision to implement layoffs follows Nike’s previous announcement of revenue forecast cuts and cost reduction strategies in December. 

This decision reflects concerns over changing consumer behaviors, with individuals opting for essential purchases and experiences over discretionary spending on items like high-end sneakers and athletic wear.

Nike is facing intensified competition from emerging brands such as Hoka and On Cloud. The company’s finance chief, Matt Friend, highlighted indications of more cautious consumer behavior globally, along with increased macroeconomic challenges in China and Europe, during the presentation of the latest financial results in December.

Nike Announces Layoffs As Dylan Mulvaney “WOKE” Marketing Fails, now 1600 workers are being laid off & possibly more. Nike didn’t learn from Adidas, Bud Light Woke ads failure. Men modeling woman’s swimsuits continues as large fan base boycott’s woke companies out of existence pic.twitter.com/u39jDZ5Kn8

— Portland Guy (@DovePortland) February 19, 2024

In China, the world’s second-largest economy, challenges abound, ranging from subdued consumer sentiment to a slowdown in real estate and exports. Similarly, Europe narrowly avoided a recession in the final quarter of 2023, with its economy stagnating. 

Notably, Germany, the largest economy in the region, experienced its first contraction since the onset of the Covid-19 pandemic last year.

The Oregon-based company’s decision to reduce its workforce underscores the complex economic landscape and shifting consumer preferences.