Nike plans to cut jobs in digital push
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[June 27, 2020] (Reuters)
- Nike Inc <NKE.N> on Friday warned of job
cuts as the world's largest footwear maker ramps up efforts to sell
directly to customers through its online and retail channels.
The planned layoffs come after the company on Thursday reported a $790
million quarterly net loss, its first in more the two years, as its
wholesale business bore the brunt of footwear retailers and department
stores shutting down due to the coronavirus outbreak.
Shares of the Dow component were down 6% in morning trading on Friday.
"We are shifting resources and creating capacity to reinvest in our
highest potential areas, and we anticipate our realignment will likely
result in a net loss of jobs," Nike said in an e-mail statement.
"Reductions are not being done for cost savings. Any savings will be
reinvested into our priorities," the footwear maker said.
Chief Executive Officer John Donahoe told analysts on Thursday the
company would now aim for digital to account for 50% of its overall
business, up from the 30% recorded in the reported quarter.
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A silhouette of a woman wearing a protective face shield and a
protective face mask is seen near a Nike logo at a shopping mall on
the first day after the government eased restrictions amid the
coronavirus disease (COVID-19) outbreak in Jakarta, Indonesia, June
15, 2020. REUTERS/Ajeng Dinar Ulfiana/File Photo
"Our vision is to create a clear and connected digital marketplace ... So we're
accelerating our approach," he said.
Donahoe, a former ServiceNow CEO and eBay <EBAY.O> executive, joined Nike
earlier this year as the company was bolstering its direct-to-consumer business.
According to media company Complex, Donahoe in a letter to employees said the
company does "not yet know how many jobs will be reduced, nor who will be
specifically impacted." (https://bit.ly/31lsziW)
(Reporting by Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila)
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