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Nike is shaking up its administration crew to strengthen its digital enterprise and pronounces job cuts

John Donahoe took over from Nike in January 2020.

Kim Kulish | Corbis via Getty Images

Nike announced a series of leadership changes and job cuts on Wednesday to focus on digital business and sell more directly to customers as the coronavirus pandemic changes buying habits.

The company said the changes it is making will result in a "net loss of jobs across the company", which will result in a one-time pre-tax termination fee of around $ 200-250 million. As of May 31, 2019, Nike had around 76,700 employees worldwide, according to the annual report.

A spokeswoman declined to tell CNBC exactly how many jobs would be affected, but insisted that this is not a cost reduction, but rather that resources should be invested in stronger parts of the business.

Among the leadership changes, all of which are listed here, Nike has appointed former head of its global categories, Amy Montagne, as vice president of the men's business. Whitney Malkiel, the former head of the specialty store, has been appointed head of the women's department. Former head of Nike’s North American children's business, McCallester Dowers, has been appointed head of kids worldwide. They all report to Michael Spillane, who will head a new consumer creation department, Nike said.

"We are announcing changes today to transform Nike faster, take advantage of our greatest growth opportunities, and expand our leadership," said John Donahoe, Nike president and chief executive, in a statement. "Now is the time to build on Nike's strengths and attract a group of experienced, talented leaders who can help advance the next phase of our growth."

Donahoe had previously hinted when Nike reported gains last month that the retailer wanted to streamline its digitization-focused business as it was affected by the Covid 19 pandemic.

While there was an unexpected net loss and 38% year-over-year decline in sales in the fourth quarter, Nike's digital sales increased 75%, which is about 30% of total sales, as buyers went to the Nike website for sneakers and exercise equipment were looking for.

Nike stocks fell less than 1% in morning trade. The stock fell about 3% this year. Nike has a market cap of $ 153 billion.

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