Nike cutting 1,600 jobs to cut costs

Barber gives basketball fan a LeBron James portrait haircut

The intricate design was created by barber Miguel Rosas, who specializes in hair portraits of famous sports stars. (Credit: Miguel Rosas via Storyful)

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

'The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities as interest in sport, health and wellness have never been stronger," Nike said in a statement to FOX Business.

Starting Friday, more than 1,600 positions will be cut as the company tries to increase 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.

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

"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.

CHONGQING, CHINA - JULY 19: A Nike logo is seen on the facade of a Nike Rise Concept Store on July 19, 2023 in Chongqing, China. (Photo by Li Hongbo/VCG via 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."

The company noted that this decision isn't about one quarter or near-term revenue but its ongoing plan to reinvest its savings to fuel its long-term growth and create capacity to invest in the areas of greatest opportunities.

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 and 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 expenditures.

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.

Read more of this story from FOX Business.