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Nike Inc. is trimming down its workforce, and about two percent of its workforce is set to be terminated. The sneaker and sports apparel manufacturer said this is a step for the company to save.
Nike is trying to reduce costs in response to growing competition and weaker sales forecast. The company did not give a specific number of employees to be let go, but it is known to have a total workforce of around 83,700 globally.
Trimming the Company to the “Right Size”
According to Bloomberg, these layoffs follow Nike’s announcement in December, wherein it said it is looking to save as much as $2 billion. At that time, the firm already explained that achieving the goal would entail reducing its workforce and refining its product lineup.
Nike said it is making these moves as growing consumer caution has been weighing on sales. This has triggered a slump in the company’s shares, which is struggling to recover as it remained down at about two percent this year.
In a statement, Nike also explained, “The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities as interest in sport, health and wellness have never been stronger.”
Implementation of the Job Cuts
The Straits Times reported that Nike will be carrying out layoffs soon, which will happen in two phases. The first one is expected to begin on Friday, Feb. 16, while the second round of the cuts will take place by the end of the quarter. Based on the estimation, over 1,600 people may lose their jobs at the company.
Lastly, the job terminations will not affect staff in Nike stores and distribution hubs. Those working at its innovation unit are safe from the cuts as well.
