Nike announced a management reshuffle and job cuts on Wednesday as part of its shift toward digital sales amid the coronavirus pandemic.
The footwear giant said the leadership changes and “strategic alignment” of its operating model will “create even greater focus and agility” as it implements the digital-focused Consumer Direct Acceleration (CDA) strategy it announced last month.
“Operational model changes to fully align against the CDA are expected to lead to a net loss of jobs across the company, resulting in pre-tax one-time employee termination costs of approximately $200 million to $250 million,” Nike said in a news release.
A Nike spokeswoman declined to say exactly how many jobs will be affected but told CNBC the layoffs were intended to invest resources in stronger parts of the business rather than cut costs.
Among the management changes, the company has named the former head of its global categories, Amy Montagne, as vice president of its men’s business, the former head of its specialty businesses, Whitney Malkiel, as head of its women’s business, and the former head of its North American kids business, McCallester Dowers, as head of kids globally.
They are all reporting to Michael Spillane, who is becoming head of a new consumer creation division.
“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,” CEO John Donahoe said.
As CNBC reports, Nike has been seeking to sell “more directly to customers as the coronavirus pandemic shifts buying habits.” In its most recent quarter, digital sales jumped 75%, representing about 30% of total revenue, as shoppers flocked to Nike’s website for sneakers and workout gear.
The company has set a target of 50% digital penetration “in the foreseeable future.”
“Before COVID-19, Nike had invested heavily in recent years in upgrading smartphone applications and other tech-focused programs amid the decline in brick-and-mortar retail and surging activity in e-commerce channels,” Agence France Presse said. “But the upheaval of the coronavirus has sped up those trends.”