Nike Plans Job Cuts at Cost of Up to $250 Million

Nike plans job cuts at a cost of up to $250 million. The move is part of its strategy to boost investment in e-commerce and tech.
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Nike  (NKE) - Get Report said it planned job cuts that will cost it $200 million to $250 million.

The Beaverton, Ore., athletic-goods giant offered little in the way of details. 

“Operational model changes to fully align against the [Consumer Direct Acceleration] are expected to lead to a net loss of jobs across the company, resulting in pretax one-time employee termination costs" of some $200 million to $250 million, Nike said in a statement.

CDA is part of Nike’s strategy to boost investment in e-commerce and technology and simplify its businesses.

The company plans to open 150 to 200 small-format stores with merchandise meant to appeal to customers in local areas.

In the quarter ended May 31, Nike swung to a loss on 38% lower revenue, thanks to store closures during the coronavirus pandemic.

Nike reported a net loss of 51 cents a share, compared with net income of 62 cents in the year-earlier quarter. Revenue was $6.31 billion against $10.18 billion a year earlier. Digital sales rose 75% in the latest quarter and accounted for 30% of total revenue.

Nike also made personnel changes, installing new leaders in Europe-Middle East-Africa, Asia-Pacific and Latin America.

In addition, Craig Williams, president of Jordan Brand, and Converse Chief Executive G. Scott Uzzell will join Nike’s executive leadership team, reporting to CEO John Donahoe.

Nike shares recently traded little changed at $98.50. They have eased 2% year to date. And the stock has bounced by almost two-thirds from its 52-week low of $60, set in mid-March.