Nike is cutting more jobs as the company continues to streamline operations and focus on the direct channel under new CEO John Donahoe.
In a filing this week with the State of Oregon, Nike said it is permanently eliminating 700 jobs. In summer, Nike had said 500 jobs were being cut.
There are two major changes going on at Nike, according to previous executive statements.
Nike has restructured how it organizes its business, which used to be arranged by category such as Running, Basketball, Nike Sportswear, Men’s and Women’s Training, Global Football and Young Athletes.
The new CEO has moved to simplify that structure, which is now organized around Men’s, Women’s and Kids’.
Nike has also accelerated its move away from wholesale to focus on the DTC channel.
Essentially, Nike believes the pandemic has sped up the shift to digital and is allowing the company to create more meaningful and profitable direct relationships with consumers without having to go through as many middlemen, i.e., wholesale accounts.
It doesn’t mean Nike won’t sell to wholesale at all – it means that Nike will cut its wholesale roster even further.
Previously, Donahoe told employees the layoffs are not to save money. Rather, any money saved will be reinvested in Nike’s priorities.
