Nike Says Upcoming Job Cuts Are Not Due To Pandemic

In an email on Thursday (June 25), Nike CEO John Donahoe said the current financial crisis will likely see the athletics retailer cutting jobs after a $790 million loss in revenue, Complex reported.

The company’s fourth quarter earnings report said it earned $6.3 billion, with digital sales seeing a spike of 75 percent compared to before the pandemic.

Donahoe reportedly said in his email that the impending layoffs were actually not due to the pandemic, but instead a response to the company’s structure, and it had become necessary to streamline the operations and simplify the company to boost speed and responsiveness.

The layoffs are scheduled for two separate phases, with one in late July and another in the fall — but other details remain uncertain.

Donahoe said the company’s retail stores, distribution centers and manufacturing facilities would not be likely to see downsizing, but the email offered no real details on what would be cut, according to the news report. Donahoe said it was unknown exactly how many jobs would be impacted or where the cuts would come from in the end.

In the email, Donahoe said the decisions “are exceptionally difficult because they impact friends and colleagues at Nike. You have my personal commitment that we will put people at the center throughout this entire process. We will support everyone impacted by this transition.”

Nike, which shuttered its stores as the pandemic was beginning in March, recently has seen an increase in revenue again in China, where the effects have been slowing and stores have been allowed to reopen.

Nike’s recent earnings report, in spite of the large loss in revenue, also showed the company going strong on Digital 3.0, with downloads of its official app shooting up over 350 percent and digital revenues passed $1 billion in both Greater China and EMEA.

Also, workouts using the Nike Training Club app increased by three times what they had been, with almost 5 million in April at the height of the pandemic.

All of it points toward a more digital future for Nike, with Donahoe having recently said he’ll be focusing on “connected data, inventory and membership” to offer better, faster experiences for customers.