Nike to lay off 'at least' 500 employees at Oregon headquarters

UPDATE: Aug. 3, 2020: In a WARN notice filed with the state of Oregon on Thursday, Nike said it would be cutting the workforce at its headquarters by "at least" 500 employees. Those layoffs will begin on Oct. 1, with "additional job separations anticipated thereafter." The layoffs include members of Nike's corporate leadership team, as well as their executive assistants, and 192 employees that work at Nike childcare centers, which are closing.

Dive Brief:

In line with the next phase of Nike's Consumer Direct strategy, the retailer rolled out several leadership changes on Wednesday and confirmed again that layoffs were coming. The retailer expects the layoffs to amount to between $200 million and $250 million in termination costs, according to a release.
Some of the most notable leadership changes include Amy Montagne, former vice president and general manager of global categories becoming vice president and general manager of men's; Whitney Malkiel, former vice president and general manager of specialty categories becoming vice president and general manager of women's; and McCallester Dowers, former vice president and general manager of kids in North America becoming vice president and general manager of kids.
Under the new structure, the above leaders will now report to Michael Spillane, who will become president of consumer creation. The company also announced new leaders in Europe, Middle East and Africa, and Asia Pacific and Latin America. All geography leadership report to Heidi O'Neill, president of consumer and marketplace.

Dive Insight:

Nike hinted at layoffs when it first discussed the Consumer Direct Acceleration strategy, noting the new phase would allow the company to "significantly simplify" the organization. Now, the retailer has taken steps to implement that plan, rolling out a new leadership structure and quantifying layoff costs.

"The leadership changes, combined with a strategic alignment of NIKE's operating model against the CDA, will create even greater focus and agility that will be enabled by a nimbler, flatter organization in service of consumers," the press release reads. "To drive this focus, NIKE will streamline its organization, including its Corporate Leadership Team (CLT)."

Although the leadership restructuring and subsequent layoffs are coming in the midst of a pandemic, Nike said in late June that the anticipated layoffs were not related to losses incurred during the health crisis. In the retailer's most recent quarter, Nike revenue fell 38%, and the retailer recorded a net loss of $790 million.

Nike's Consumer Direct Acceleration focuses on three areas: a "marketplace of the future" that allows for a consistent customer experience across Nike and its partners, a simpler approach to product categories and further investment in digital. These leadership changes seem mostly aimed at the second, with new leaders for Men's, Women's and Kids, which Nike says will allow it to "create product with deeper insights and drive even greater specialization through performance sport and sport lifestyle."

Also outlined in the release was a shift that puts the leaders of the Jordan Brand and Converse on Nike's executive leadership team, reporting directly to CEO John Donahoe.

At its crux, this new phase of the athletic retailer's strategy is focused on Nike's direct-to-consumer channels — which includes its owned stores, and its website and mobile apps — rather than wholesale. As part of that effort, the retailer also announced up to 200 new small-format stores in June, based on its Nike Live concept, and launched another digitally-enabled store concept in early July.