Nike job cuts could cost between US$200 and US$250 million

Worldwide
Published:  12 August, 2020

The global sportswear manufacturer is reportedly seeking to streamline its business to focus on digital sales.

Nike has announced a series of changes in senior managerial staff and job cuts as it aims to focus on its digital business as the coronavirus pandemic shifts buying habits. The number of redundancies has not been disclosed but, allegedly, 500 jobs are to be axed at its Portland headquarters. As previously reported by ILM, Nike posted net loss of US$790 million for the fourth quarter of its fiscal 2020 as it took a hit from the Covid-19 pandemic. According to the company, the changes it is undertaking could lead to a “net loss of jobs across the company”, resulting in pre-tax, one-time employee termination costs between US$200 million and US$250 million. As of May 31, 2019, Nike had approximately 76,700 employees worldwide, according to its annual report. 

John Donahoe, President and CEO, Nike said the company was announcing changes “to transform Nike faster”, accelerate against its “biggest growth opportunities” and extend its leadership position. “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”, said Donahoe in a statement.

Nike has also recently announced that it has abandoned its plans for the new factory in Arizona, U.S., which was expected to begin operations this year and employ 500 people.

Source: CNBC/ABC 15