FILE PHOTO: The first day after the government eased restrictions amid the outbreak of coronavirus disease (COVID-19) in Jakarta, a silhouette of a woman wearing a face shield and face mask is seen near a Nike logo in a mall. Indonesia, June 15, 2020. REUTERS / Ajeng Dinar Ulfiana / File Photo
(Reuters) – Nike Inc (NKE.N) warned on Friday of job cuts as the world’s largest shoe maker steps up efforts to sell directly to customers through its online and retail channels.
The planned layoffs come after the company reported a quarterly net loss of $ 790 million on Thursday, the first in more than two years, as its wholesale business suffered the brunt of shoe retailers and department stores that closed due to the coronavirus outbreak.
Dow component shares fell 6% in Friday morning trading.
“We are shifting resources and building capacity to reinvest in our areas of greatest potential, and we anticipate that our realignment will likely result in a net loss of jobs,” Nike said in an email statement.
“No reductions are being made to save costs. Any savings will be reinvested in our priorities, ”said the shoe maker.
Chief Executive John Donahoe told analysts on Thursday that the company would now aim for digital to represent 50% of its overall business, compared to 30% in the reported quarter.
“Our vision is to create a clear and connected digital market … So we are accelerating our approach,” he said.
Donahoe, former CEO of ServiceNow and eBay (EBAY.O) executive, he joined Nike earlier this year as the company was reinforcing its direct-to-consumer business.
According to media company Complex Donahoe, in a letter to employees, said the company “does not yet know how many jobs will be cut, nor who will be specifically affected.” (bit.ly/31lsziW)
Report from Nivedita Balu in Bangalore; Edited by Sriraj Kalluvila