Nike Layoffs Expected

Nike plans on reducing jobs but the layoffs are reportedly not connected to its 38% fourth-quarter revenue drop announced last week. The job reduction would “not be done for cost reasons,” or because of the pandemic, according to an email sent by Nike CEO John Donahoe.

The layoffs would be restructuring moves to help fix the “overburdened matrix,” aiming to simplify how Nike works and increase its speed and responsiveness, according to the memo.

Workers within retail stores, distribution centers, and manufacturing facilities reportedly won’t be affected. Layoffs are expected to begin in July and with phases happening through the fall.

Despite the top-line loss, there were some positives for Nike in the quarter as digital sales increased to 30% of overall revenue. Donahoe expects digital sales to reach 50% in the foreseeable future. Memberships to its digital apps doubled during the pandemic to 25 million, with women making up half the members.

Other notable numbers:

— $6.3 billion quarterly revenue.

— $790 million loss for the quarter, down from last year’s $989 million profit in the quarter.

— 90% of global stores shut down for eight weeks between mid-March and mid-May.

— 85% of U.S. stores are now reopened.

— $12.4 billion FY2020 direct-to-consumer sales.