Nike announced on Wednesday that they will be cutting jobs due to the impact the coronavirus has had on their business. In addition, the sports apparel giant will shake up its leadership team as the company attempts to adjust to the changes COVID-19 has brought to their business.
According to CNBC:
The company said the changes it is making will lead to a “net loss of jobs across the company,” which will result in pretax, one-time employee termination costs of roughly $200 million to $250 million. As of May 31, 2019, Nike had approximately 76,700 employees worldwide, according to its annual report.
A spokeswoman declined to tell CNBC exactly how many jobs will be affected but insisted that this is not a cost-cutting move and instead is meant to invest resources in stronger parts of the business.
Among the leadership changes, which are all listed here, Nike has named the former head of its global categories, Amy Montagne, as vice president of its men’s business. It named the former head of its specialty businesses, Whitney Malkiel, as head of its women’s business. The former head of Nike’s North American kids business, McCallester Dowers, has been named head of kids globally. They are all reporting to Michael Spillane, who is becoming head of a new consumer creation division, Nike said.
Nike President and CEO John Donahoe described the changes as an opportunity to “transform” Nike to meet their “biggest growth opportunities.”
“We are announcing changes today to transform Nike faster, accelerate against our biggest growth opportunities and extend our leadership position,” Nike President and Chief Executive Officer John Donahoe said in a statement. “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.”
That next phase of growth, Nike believes, will be their digital offerings. The company’s retail divisions took serious losses due to the coronavirus lockdowns.
“While it reported an unexpected fiscal fourth-quarter net loss and a sales decline of 38% year over year, Nike’s digital sales soared 75%, representing about 30% of total revenue, as shoppers flocked to Nike’s website for sneakers and workout gear,” CNBC reported.
Nike currently operates 384 stores and outlet locations in the U.S.
Follow Dylan Gwinn on Twitter @themightygwinn