(Bloomberg) -- Nike Inc. shares fell as much as 4% after the sportswear giant said it will slash its global workforce by about 2%, pushing to reduce costs to counter a weaker sales outlook and growing competition.

The Oregon-based firm didn’t provide the number of workers that will be affected, though it currently has about 83,700 employees worldwide. 

“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 late Thursday.

The job cuts follow an announcement in December that the company is looking for as much as $2 billion in cost savings, including reducing its workforce and simplifying its product lineup as growing consumer caution weighs on sales. 

That sparked a slump in Nike’s shares, which have struggled to recover and are down about 6% this year, including Friday’s decline.

Oppenheimer analysts led by Brian Nagel downgraded their rating on Nike’s shares Friday, saying revenue is likely to remain sluggish due to “spotty consumer demand, lulls in product innovation and modest competitive incursions.”

The analysts hailed the cost-cutting effort but added, “We believe benefits are likely to take time to materialize, particularly in areas such as product development and innovation.”

The job cuts will occur in two phases, according to a Nike memo seen by Bloomberg News. The first phase will kick off Friday and run into next week, while the second round will be completed by the end of the company’s fourth quarter.

Willamette Week reported the planned 2% job cuts earlier Thursday in the US.

(Updates with shares starting in first paragraph, analyst comments in sixth paragraph.)

©2024 Bloomberg L.P.