Nike ramps up digital efforts, layoffs expected

 

Global sportswear giant Nike will be ramping up its efforts to go digital, according to Reuters. The sportswear company will however, also be laying off staff amid the move. In the news article, Nike CEO John Donahoe was quoted saying the company aims for digital to account for 50% of its overall business. Currently, in its financials, digital in Nike is recorded at 30% of total revenue.

Nike also added in a statement to media that the company is reinvesting in its highest potential areas by shifting resources and creating capacity, and that the realignment will “likely result in a net loss of jobs”. However, the company explained that the layoffs are not perceived as cost savings, and that any and all savings will be reinvested into its priorities. Marketing has reached out to Nike for additional information on its digital push and exact number of staff impacted by the layoffs.

The digital push and layoffs come shortly after Nike reported a 38% decrease in revenue to US$6.3 billion, for the fourth quarter ended 31 May 2020. This was primarily due to owned and partner physical store closures across North America, EMEA and APLA due to COVID-19, partially offset by growth in Greater China.

While 90% of NIKE-owned stores were closed for roughly eight weeks in the quarter to help slow the spread of the COVID-19 pandemic, the company said it accelerated its connection and engagement with consumers leveraging the strength of its digital ecosystem. As such, Nike’s digital sales increased by 75% in the fourth quarter, with strong double-digit increases across all geographies.

Meanwhile, earlier this month, CEO Donahoe spoke up about getting his own house in order as brands around the world stood up for the Black Lives Matter movement in the US. In an internal memo posted on CNBC and Hypebeast,, the CEO said Nike must continue to foster and grow a culture where diversity, inclusion and belonging is valued and is real, and to be better than society as a whole.

The brand was raved about on social media after it released a video asking viewers not to "pretend there isn't a problem in America". The text-only video came in light of the death of George Floyd, who died of injuries after suffering from police brutality and as protests continue to break out across the US. Nonetheless, the ad also copped flak for not having a more diverse board despite its support to the Black community and athletes.

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