Nike's Wednesday announcement included impending changes to the company's leadership structure and a reduction of positions within the company as a whole. The company is projecting the costs of reducing positions to carry a price tag of between $200-250 million. The potential for layoffs was hinted at last month in an email to employees. Nike's CEO has since claimed that the downsizing has nothing to do with the pandemic.
"We are announcing changes today to transform Nike faster, accelerate against our biggest growth opportunities and extend our leadership position," said CEO John Donahoe. "Now is the right time to build on Nike's strengths and elevate a group of experienced, talented leaders who can help drive the next phase of our growth."
Nike's leadership shakeup includes several changes in position and the creation of at least one new position overall. The former head of global categories, Amy Montagne, has been appointed as vice president of the company's men's division, while Whitney Malkiel, formerly heading Nike's specialty businesses, will take over the women's division. McCallester Dowers received a bump up to the head of the kid's division from being in charge of just North American operations. Michael Spillane will head the new consumer creation division.
Even if the downsizing has nothing to do with the coronavirus pandemic, as Nike claims, the drawdown will inevitably help with the pinch the company has felt as a direct result. Nike posted a considerable loss of $790 million last month amid the closure of its physical storefronts. What perhaps motivated the company to shift its priorities, however, was the 75% spike in online sales Nike saw in the same period.