Nike cutting 1,600 jobs after weak spending

Nike is laying off 2% of its corporate workforce as it contends with weaker consumer spending. 

Starting Friday, more than 1,600 positions will be cut as the company increases its investment in high priority areas such as running, women’s clothing and its Jordan brand, CEO John Donahoe told employees, according to a memo seen by The Wall Street Journal. 

A second phase of the cuts will be completed by the end of the quarter. Employees in stores, distribution centers or on the innovation team aren’t expected to be let go, according to the report.

Nike did not immediately respond to FOX Business’ request for comment.

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The company employed more than 83,000 people as of May 31, 2023.  

Shrink-wrapped limited edition Nike Inc. trainers inside the Presented By sneaker resale store in London, U.K., on Aug. 13, 2021. (Hollie Adams/Bloomberg via Getty Images / Getty Images)

“This is a painful reality and not one that I take lightly. We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable,” Donahoe said in the memo.

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A woman carries a shopping bag while passing in front of a Nike Inc. store in Portland, Oregon, on Wednesday, April 24, 2013. (Natalie Behring/Bloomberg via Getty Images / Getty Images)

To better compete with rivals, the chief executive said the company “must edit, shift and divest less critical work to create greater focus and capacity for what matters most.” 

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In December, the Oregon-based company announced a $2 billion cost savings plan after seeing weak consumer spending, which it blamed on a “highly promotional marketplace with increased macro headwinds, especially on digital.”  

The company also cut its annual sales forecast to 1% for the year.

Part of its cost-savings plan included simplifying the company’s product assortment, increasing automation and use of technology, as well as streamlining the organization.

At the time, the company noted that plans to streamline would cost between $400 million to $450 million, largely due to severance costs.  

Nike is among the latest in a growing list of companies that have cut jobs. Layoffs have mounted across several industries, including tech, media and Wall Street.