Nike Inc. shares took a hit, dropping as much as 4%, following the announcement that the sportswear giant plans to reduce its global workforce by approximately 2%. This strategic move aims to streamline operations and cut costs in response to a softer sales outlook and intensifying competition in the market. While Nike did not disclose the exact number of employees affected, the company currently boasts a global workforce of about 83,700 individuals. In a statement, Nike emphasized that these actions are geared towards aligning the organization with its most significant growth opportunities, particularly amid robust interest in sports, health, and wellness.

This initiative follows a previous announcement made in December, where the company outlined plans to achieve up to $2 billion in cost savings. Among the strategies mentioned were workforce reductions and simplification of product offerings, prompted by a cautious consumer environment impacting sales. The job cuts will be implemented in two phases. The first phase is set to commence immediately and extend into the following week, while the second round is slated to conclude by the end of Nike's fourth quarter.