Oregon’s largest homegrown company will shrink in the coming months as new CEO John Donahoe begins a radical reorganization aimed at making Nike more efficient.
It is unclear how many jobs will be cut. Nike said the layoffs will take place gradually throughout the summer, fall, and perhaps beyond.
Employees learned of the downsizing on Thursday in an email from Donahoe. He said that during a multi-week listening tour, he repeatedly heard that Nike’s internal structure had become too complicated to do things.
“The most frequent request I heard from you by far was your request to simplify the way we work,” Donahoe said in an email first reported by the Complex news site. “Across the company, it was clear that we need to reduce complexity and increase speed and responsiveness.”
Nike reported disappointing quarterly financial figures on Thursday, but Donahoe said the pending layoffs are not related to those poor results.
No one expected the company to have a good quarter amid a global pandemic. But few expected the company’s sales to decrease by 40% or its losses to exceed $ 700 million.
Shares fell more than 7% on Friday morning to $ 94.21. The stock traded between $ 60 and $ 106.62 in the past year.
The reorganization is not about cutting costs, Donahoe said. Your goal is to create a better environment for completing important tasks. The subject line in her email to employees, a copy of which was obtained by The Oregonian / OregonLive, said “Transforming Nike Faster.”
“Our Employee Engagement Survey earlier this year reaffirmed the same,” Donahoe said in her email. “Many of you share concerns about how difficult it is to get the job done: I work in silos. Too many approvals are needed. Duplicate complexity and resources resulting in a lack of responsibility. An overloaded matrix.
The company will realign in three product categories: men, women, and children. Donahoe said there are great untapped opportunities in the women’s and children’s businesses.
Donahoe said he will offer additional details at a company-wide meeting on Tuesday.
“These decisions are exceptionally difficult because they affect Nike friends and colleagues,” he wrote in the email. “You have my personal commitment that we will put people at the center throughout this process. We will support all those affected by this transition. “
Jeff Manning
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