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Nike is cutting close to 1,700 jobs, about 2 per cent of its employees

FILE - In this file photo dated Tuesday, Sept. 4, 2018, a Nike company logo is displayed outside a Nike store in Charlotte, N.C., USA. (AP Photo/Chuck Burton, FILE) FILE - In this file photo dated Tuesday, Sept. 4, 2018, a Nike company logo is displayed outside a Nike store in Charlotte, N.C., USA. (AP Photo/Chuck Burton, FILE)
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Nike will lay off about 2 per cent of its employees, or close to 1,700 people, as the sportswear behemoth looks to cut as much as US$2 billion in costs.

鈥淭he actions that we鈥檙e taking put us in the position to right-size our organization to get after our biggest growth opportunities,鈥 a Nike (NKE) spokesperson said in a statement Friday. 鈥淲hile these changes will impact approximately 2 per cent of our total workforce, we are grateful for the contributions made by all Nike teammates.鈥

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 US$2 billion in savings over the next three years.

Customers are changing their behavior, passing up discretionary purchases of goods 鈥 like expensive sneakers and athletic wear 鈥 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鈥檚 latest financial results in December, Nike finance chief Matt Friend said its gloomier outlook reflected 鈥渋ndications of more cautious consumer behavior around the world鈥 and also mentioned 鈥渋ncreased macro headwinds in China and in Europe.鈥

China, the world鈥檚 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鈥檚 biggest economy,  last year for the first time since the onset of the Covid-19 pandemic.

Nathaniel Meyersohn contributed to this article.

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