© Reuters. FILE PHOTO: People visit the Nike store at 5th Avenue during the holiday season in New York City, U.S., December 9, 2022. REUTERS/Eduardo Munoz/File Photo
(Reuters) -Nike on Thursday said it will cut about 2% of its total workforce, or more than 1,600 jobs, as the sportswear giant looks to cut costs after flagging weaker profits this year.
Nike (NYSE:)’s global peers Adidas (OTC:), Puma and JD (NASDAQ:) Sports, too, have 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.