Nike cuts jobs, shakes up leadership in bid to boost digital sales
Company expects one-time termination costs related to changes of $200M to $250M
Nike will cut jobs and shake up its leadership structure as part of an increased focus on e-commerce, the company announced Wednesday.
The company unveiled a number of leadership changes as part of an effort to emphasize digital sales efforts and “unlock long-term growth and profitability.” Amy Montagne was named the new head of Nike’s men’s apparel business, while Whitney Malkiel will head up its women’s business. Both executives will report to Michael Spillane, Nike’s new president of consumer creation.
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Nike said the changes would result in a “net loss” of jobs but did not specify how many employees would be affected by the changes. The company expects one-time termination costs related to the changes of $200 million to $250 million.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NKE | NIKE INC. | 75.09 | +1.76 | +2.41% |
“We are announcing changes today to transform NIKE faster, accelerate against our biggest growth opportunities and extend our leadership position,” said Nike CEO John Donahoe. “Now is the right time to build on NIKE’s strengths and elevate a group of experienced, talented leaders who can help drive the next phase of our growth.”
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Donahoe first informed employees of potential layoffs in an email last month. At the time, the Nike CEO said the changes were meant to make the company more efficient and were not driven by financial difficulties during the coronavirus pandemic.
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Last month, Nike posted a rare loss of $790 million in its fourth-quarter earnings report. The company cited the mass closure of its brick-and-mortar stores as a key factor in the difficult quarter.
Digital sales have been a bright spot for Nike’s business during the pandemic. Sales rose 75 percent last quarter as the company emphasized direct-to-consumer transactions.