Nike CEO John Donahoe announced in a company-wide email on Thursday that the brand will soon be "forced to make some difficult choices" that will "likely result in a net reduction of jobs."
The email, viewed by Complex, comes after Nike posted a net loss of $790 million in its latest quarterly earnings report on the same day. The company attributed the loss in part to the strain COVID-19 placed on its business globally.
Nike's results put fourth-quarter revenues at $6.3 billion and digital sales in the same period up 75 percent.
Through his message about the pending layoffs at Nike, Donahoe ensured that the reductions in staff would "not be done for cost reasons." The CEO also said they were not a response to the coronavirus pandemic.
Instead, he wrote, the restructuring is a remedy to the "overburdened matrix" the company has become. He said the planned cuts are meant to simplify how Nike works and increase speed and responsiveness.
The email offers few details with respect to who among the brand's thousands of employees will be affected. It mentions that workers at Nike's retail stores, distribution centers, and manufacturing facilities are not expected to be cut. But Donahoe also wrote in it that Nike does "not yet know how many jobs will be reduced, nor who will be specifically impacted."
The layoffs are scheduled to happen in phases, the first one concluding in late July and the last one in the fall.
"These decisions are exceptionally difficult because they impact friends and colleagues at Nike," Donahoe wrote in the email. "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."
A company meeting around the restructuring is planned for Tuesday morning.
UPDATE 6/26: In a statement provided to Complex, Nike underlined that the anticipated job cuts are not a result of the loss it posted this week. The brand's full statement appears below:
"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. 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.
Reductions are not being done for cost savings. Any savings will be reinvested into our priorities.
We are committed to showing compassion and respect for our transitioning employees through thoughtful and robust severance practices, consistent with our company values, our legal obligations, the competitive marketplace and individual employee situations."
