Nike Plans Job Cuts in Shift to Digital Future

Nike says the athletic-apparel company will cut staff as it shifts to a digital future.
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Nike  (NKE) - Get Report said Friday that the world's biggest sports-apparel company will likely cut staff as it shifts to a digital future.

Shares of the Beaverton, Ore., company at last check were down 6.6% to $94.74.

The company said in a statement that "Consumer Direct Acceleration is the next digitally empowered phase of our strategy."

"We are building a flatter, nimbler company and transforming Nike faster to define the marketplace of the future," the statement said. 

"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 added that the "reductions are not being done for cost savings. Any savings will be reinvested into our priorities." 

Chief Executive John Donahoe had informed the staff in a companywide email that Nike would soon be "forced to make some difficult choices," according to the Complex. He added that the job cuts were not a response to the coronavirus pandemic.

The announcement came on the same day Nike said fourth-quarter revenue fell 38% from a year earlier to $6.3 billion, short of Wall Street's forecast of $7.3 billion. 

Digital sales, which account for 30% of total revenue, was the quarter's one bright spot, rising 79% from last year for the quarter and passing the $1 billion mark annually in both Europe and China.

North American revenue halved, Nike said, to just $2.23 billion while sales in China held steady at $1.65 billion as stores reopened over the quarter in the world's second largest economy.

Across North America and the Europe-Mideast-Africa and Asia-Pacific-Latin-America regions, some 90% of Nike-owned stores were closed for roughly eight weeks in the quarter in response to the coronavirus, the company said in a statement.