(NewsNation) — Athletic shoe and apparel company Nike announced Thursday that it will cut costs by $2 billion over the next three years, including employee layoffs.
According to NewsNation affiliate The Hill, the company said it anticipates weaker consumer demand in the months ahead. Nike CFO Matt Friend blamed the global economy in the company’s earnings call, saying slowing sales in China and Europe are cause for lowered expectations.
Friend also announced $400- to $450 million in expenses “primarily related to severance costs” in the upcoming quarter. It is unclear how many employees will be laid off or from which facilities.
The announcement had an immediate impact on Wall Street, with company stock plunging 10% on Friday.
Nike’s economic outlook may have also played a role in shares of other sports-wear firms like Lululemon Athletica, Foot Locker and Dick’s Sporting Goods dropping between 3% and 1.3%, according to Reuters.
Friend urged investors to remain hopeful in the company after the news on Wall Street.
“While we expect the operating environment to remain dynamic, we have been here before, and we know that moments like this are when Nike operates and executes at its best,” he said. “We will stay on the offense, manage risk, optimize opportunity, and leverage our strengths to create even further competitive separation.”
Reuters and NewsNation affiliate The Hill contributed to this report.