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Nike to Implement $2B Cost-Cutting Plan, Includes Job Reductions As Sales Outlook Weakens

The corporate giant has to strategically cut costs.
ShreddER January 2, 2024
Nyjah Nike SB
Credit: Nike SB

Nike has unveiled a robust cost-cutting initiative, aiming to achieve up to $2 billion in savings, in response to a weakening sales forecast worldwide.

According to reports, the strategy includes employee layoffs and streamlining the product lineup for the corporate sneaker brand.

During a recent conference call, Nike's Chief Financial Officer, Matt Friend, pointed to a more cautious global consumer environment, citing specific challenges in Greater China, Europe, the Middle East, and Africa.

The company anticipates a modest 1% increase in full-year revenue, following declines in the current quarter and a slight uptick in the subsequent one.

Addressing the evolving landscape, CEO John Donahoe stated, "We've taken a more prudent approach to our planning for the balance of the year." Notably, Nike acknowledges reduced growth levels in its e-commerce segment, traditionally a robust sector in the retail industry.

The company foresees restructuring charges of $400 million to $450 million in the current quarter, primarily attributed to employee severance costs. Friend emphasized the intent to streamline management layers as part of the restructuring process.

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