Nike Job Cuts to Cost Up to $250 Million in One-Time Charge

(Bloomberg) -- Job cuts at Nike Inc. will cost it between $200 million and $250 million as the world’s largest athletic brand refocuses on selling directly to consumers.

The company, which had already announced in June a new phase in its e-commerce push called the Consumer Direct Acceleration, said in a statement Wednesday that the effort was “expected to lead to a net loss of jobs across the company,” resulting in the one-time charge. It didn’t say how many positions would be eliminated, and a representative declined to comment further.

Nike’s strategy shift comes as the pandemic expedites a rethink of physical storefronts that had already been bubbling for years. Brick and mortar stores, in particular mall-based ones, have been some of the hardest hit by coronavirus as scores of consumers turn to online shopping. E-commerce sales were a bright spot for Nike last quarter, growing 75% at a time when overall revenue plunged.

Nike also announced Wednesday a series of senior leadership changes supporting the direct-to-consumer shift, including new leaders in Europe, the Middle East and Africa, and in its Asia Pacific and Latin America division. Additionally, Craig Williams, president of the Jordan brand, and G. Scott Uzzell, chief executive officer of Converse Inc., will join Nike’s executive leadership team.

The company said the new structure and leadership changes will give it a “nimbler, flatter organization,” allowing it to make decisions faster.

Nike shares were little changed on Wednesday morning.

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