Nike Plans Layoffs, $2B in Cuts

After slashing its annual sales forecast to 1%, Nike announced it's going to make $2 billion in cuts. An executive said that goal will be reached through layoffs and increased automation, NPR reports. Decreased demand in China, particularly affecting online sales, and Europe are behind the low projection, Chief Financial Officer Matt Friend said in an earnings call Thursday. "We are seeing indications of more cautious consumer behavior around the world," he said. In the greater China market, which includes Hong Kong, Taiwan, and Macau, Friend said store sales rose 16% while online sales dropped 22% in the most recent quarter.

The sportswear company did not say how many layoffs it's planning, though Friend said management layers and product lines will shrink. Revenue didn't change much for the quarter reported Thursday, but Nike said next quarter will be worse. Consumer demand this holiday shopping season is running strong in the US, per the Hill, but not everywhere else. Friend gave analysts a pep talk, telling them "moments like this are when Nike operates and executes at its best." Shares dropped 11% on Friday, though. Nike competitors Adidas, Puma, and Lululemon also saw stock prices fall. (More Nike stories.)