London (CNN) — Nike will lay off about 2% of its employees, or close to 1,700 people, as the sportswear behemoth looks to cut as much as $2 billion in costs.
“The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities,” a Nike (NKE) spokesperson said in a statement Friday. “While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”
According to its latest annual report, the company employed around 83,700 people worldwide as of May 31, 2023.
In December, Nike slashed its revenue forecast and announced cost cuts amid growing concerns that consumers around the world are slowing their spending. The company said it was looking for up to $2 billion in savings over the next three years.
Customers are changing their behavior, passing up discretionary purchases of goods — like expensive sneakers and athletic wear — for basics and experiences such as concerts and travel.
Nike is also facing tough competition from upstart brands like Hoka and On Cloud.
When presenting the company’s latest financial results in December, Nike finance chief Matt Friend said its gloomier outlook reflected “indications of more cautious consumer behavior around the world” and also mentioned “increased macro headwinds in China and in Europe.”
China, the world’s second-largest economy, is facing huge challenges, from downbeat consumers to a real estate slump and weaker exports.
Meanwhile, Europe avoided a recession by the slimmest of margins in the last three months of 2023, with its economy flatlining, official data confirmed Wednesday. And Germany, the region’s biggest economy, shrank last year for the first time since the onset of the Covid-19 pandemic.
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