On Thursday, Nike announced that it planned to eliminate roughly 1,600 jobs, or about 2% of its entire workforce. The sportswear giant is looking to reduce expenses after reporting lower-than-expected profits this year.

As customers cut back on non-essential spending, Nike’s international competitors Adidas, Puma, and JD Sports have also issued warnings about lower profitability this year.

Nike revealed a $2 billion savings strategy in December that would be implemented over the following three years. The plan called for decreasing management layers, tightening product supply, enhancing supply chains, and expanding automation.

The corporation also revealed that its third-quarter employee severance costs will range from $400 million to $450 million.

As per a company filing, Nike employed over 83,700 people as of May 31, 2023.

A second round of the layoffs is likely to be completed by the end of the current quarter, according to The Wall Street Journal, which broke the initial news of the announcement.