John Donahoe took over as CEO of Naik in January 2020.
Kim Kulish | Corbis via Getty Image
Naik on Wednesday announced several leadership changes as well as job cuts in an effort to focus on his digital business and sell directly to customers due to the coronavirus virus epidemic.
The company said the changes being made would “result in a net loss of jobs in the company”, resulting in a pretax, one-time employee termination cost of approximately $ 200 million to $ 250 million. As of its annual report, as of May 31, 2019, Nike had approximately 76,700 employees worldwide.
A spokeswoman declined to tell CNBC how much work would actually be affected but stressed that it was not a cost-cutting move and instead invested resources in stronger parts of the business.
Amid the leadership change, all of which are listed here, Nike has named Amy Montaigne, its former head of global categories, as its vice president of men’s business. It named its former head of specialty businesses, Whitney Malkil, as its head of women’s business. McClaster Dowers, former head of Nike’s North American Kids business, has been named the head of children globally. They are all reporting to Michael Spillane, who is becoming the head of a new consumer manufacturing division, Nike said.
“We are announcing Nike to rapidly transform, accelerate against its biggest growth opportunities and expand its leadership position,” Nike Chairman and CEO John Donhao said in a statement. “Now is the right time to build on Nike’s strengths and call on a group of experienced, talented leaders who can help drive the next phase of our development.”
Donahoe indicated when Nike reported earnings last month that the retailer wanted to streamline its business with a focus on digital, as it took a hit from the Kovid-19 epidemic.
While it reported an unexpected fiscal fourth-quarter net loss and a 38% sales decline year-over-year, Nike’s digital sales rose 75%, representing about 30% of total revenue, as shoppers reported sneakers and Come to Nike’s website for workout gear.
Several retailers, including Macy’s, Jessie Penny, Levi’s, Men’s Warehouse owner Tailored Brands and Sephora, have announced permanent layoffs between corporate employees and workers at the store level during the epidemic. J. Dozens, including Crew and Neiman Marcus, filed for bankruptcy.
The industry was seen as one of the strongest in the crisis. Its revenue increased to more than $ 39 billion in FY 2019, from $ 36.4 billion earlier. The company has focused on investing in department stores such as wholesale channels versus its own website and website.
Nike, which also owns the Converse brand, had 384 stores including outlet locations in the US as of its latest annual filing.
Nike shares were down less than 1% in morning trading. The stock is down about 3% this year. Naik has a market cap of $ 153 billion.