Nike to eliminate over 1,500 jobs as part of a comprehensive restructuring plan.

• Nike is reducing its workforce by 2% to focus on growth and improve efficiency.
• The company is facing a decline in consumer spending and aims to cut $2 billion in expenses over the next three years as part of a restructuring plan.
• In a memo obtained by CNBC, CEO John Donahoe stated, "This is how we will reignite our growth."

The company announced that it will cut more than 1,500 jobs as part of a broader restructuring, amounting to 2% of its current workforce.

The sneaker giant based in Beaverton, Oregon, stated its intention to allocate its capital more effectively by investing in its growth areas, including running, women's, and the Jordan brand.

In a memo obtained by CNBC, CEO John Donahoe stated, "This is how we will reignite our growth."

He acknowledged the painful reality and emphasized that it was not something he took lightly. He also stated that they were not currently performing at their best and that he held himself and his leadership team accountable for it.

Nike announced that it will implement layoffs in two phases. The first phase will begin this week, while the second phase will be completed by the end of the company's fiscal fourth quarter, which usually takes place in May. However, the timeline for cuts in the EMEA region will differ based on local labor laws, according to the company.

Nike stated that the layoffs will not affect retail employees at their stores or warehouse workers.

Nike's sales may decline due to consumers' spending caution and the retail industry's anticipation of a slowdown in demand for discretionary items like clothes and shoes.

Nike announced a cost-cutting plan worth $2 billion in December, which included lowering its sales outlook due to anticipated lower demand, wholesale orders, soft online sales, and a market that heavily relies on promotions.

Nike aims to reduce costs by simplifying its product line, increasing automation and technology use, streamlining its organization, and utilizing its scale for greater efficiency.

Nike had been quietly laying off employees over the past several weeks and had signaled that it was planning for a broader restructuring, according to a report by The Oregonian. The report stated that a series of divisions saw cuts, including recruitment, sourcing, brand, engineering, human resources, and innovation.

Since December, the total number of jobs Nike has cut is unclear.

On Friday, Oppenheimer lowered Nike's 12- to 18-month price target and downgraded its performance, citing sluggish consumer demand, lulls in production innovation, and competition.

The company and its brand are transitioning, near-term, although NKE is not broken, the firm stated.

Staffers who were laid off will receive a comprehensive package of financial, health-care, and outplacement support services, as stated by Donahoe.