Nike on Thursday said that it will reduce its workforce by about 2%, or more than 1,600 people, in a bid to cut costs. Nike Chief Executive John Donahoe said the company is using its resources to increase investment in categories like running, women’s apparel and the Jordan brand, according to an employee memo reviewed by The Wall Street Journal. The cuts aren’t expected to affect employees in stores and distribution centers or those in its innovation team.
The Beaverton, Ore.-based sneaker company had about 83,700 employees as of May 31.“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. The job cuts are expected to start Friday and a second phase will be complete by the end of the quarter, the memo said. Nike in December lowered its revenue outlook for the year amid concerns that consumers are becoming more cautious with their spending. At the time, it said it would look to shave up to $2 billion in costs over the next three years through actions including job cuts and organizational streamlining. “To compete, we must edit, shift and divest less critical work to create greater focus and capacity for what matters most," Donahoe said in the memo. The announcement came as U.S. retail sales declined in January from the prior month, which showed robust consumer spending activity during the holiday season.