Thread regarding Nike Inc. layoffs

2 years later. Next% reverses most of CDA’s mistakes.

They treat people very sad.I didn’t do anything wrong . They like fighting war. It is not me .

@3ctw

I've heard serial killers who sound more compassionate about their fellow humans than this ghoul.

“I have fired so many people in my career” is nothing a decent person ever says out loud. Much less so proudly.

Certainly explains a lot about the state of Nike these days.

His role was to finish the GRAT, in unexpected bumpy waters, even take a fall if need be, but finish that spectacular GRAT climb and it's reaping.

TAK got his, and a pool of 11 Billion, brilliant.

Seeing Quantitative Easing for what it could be, the gift that kept on giving( pun intended).

Just a Consultant, hiring other Consultants, some day Boards will look back on the malpractice of the strategy, that dealt with the apparent problem of no clear go forward strategy, by out sourcing a potential solution, which can only lead to not having a real internally regenerative solution.

JD is no Marty Kahn.

Can you short a stock in a GRAT Trust. That would be something.

Thanks for the cut and paste job, Kish is a cottage industry of PHK whispering.

March 24, 2021: Reports surface of Chinese consumers burning Nike shoes after the company releases a statement opposing forced labor of Uyghurs in the Xinjiang Uyghur Autonomous Region.

That, by far, was the d-mbest thing Nike has done. Nike has paid for that mistake dearly, so far, and will continue to pay for it in the future. China is for China now! Someone screwed up big time.

Fixed that paywall for you all :)

Best quote:

"I have fired so many people in my career," he said in a 2018 talk with Bay Area entrepreneurs. "Remember, I grew up at Bain. For every 10 people we hired, we managed half out within two years, we managed 75% out within five."

Welcome to your future at Nike.

John Donahoe had his work cut out for him. In January 2020, when he started as Nike's CEO, the sneaker giant was facing its #MeToo moment and a series of scandals. Then the pandemic hit. Industry watchers wondered how an outsider could navigate Nike's insular culture and dizzying organizational structure at such a perilous time. 
By all financial accounts, Donahoe has prevailed. The company's shares are up 46% since Donahoe started, creating more than $75 billion in shareholder wealth. The company's quarterly dividend is up roughly 25% to $0.30 a share.
To some, though, the success has come at a cost. Some current and former insiders are worried about an exodus of Nike veterans, which marks a shift for a company known for employee longevity. 
For them, the question is no longer whether Donahoe can navigate Nike's culture, but rather how he is changing it.
Donahoe's predecessors, the cofounder Phil Knight and longtime CEO Mark Parker, were famously sports fanatics and shoe dogs. Donahoe, by contrast, has been described as a "technocrat" and relative outsider to the sneaker culture that defines Nike's most passionate fan base.
Nike employees and analysts agreed Donahoe has established himself as a change agent and financial success. He's pushed through the biggest corporate overhaul in recent Nike history during a global pandemic while dealing with worldwide supply-chain chaos. 
Insider spoke with 15 current and former employees for this story, as well as industry analysts. Insider granted anonymity to Nike employees who are not allowed to speak with the media without approval. Former employees were given anonymity in order to allow them to speak freely and not jeopardize professional relationships. Their identities are known to Insider.
Nike did not respond to emails seeking comment for this story and requests to interview Donahoe. 

Jan. 13, 2020
John Donahoe’s first day at Nike. He’s the second outside CEO in the company’s history. He spends his first week in Asia as part of a global tour.

Feb. 5, 2020
Donahoe takes part in a star-studded New York event with company endorsers. Some industry watchers later criticize Donahoe for lacking the connection to sneaker culture of CEOs past.

March 15, 2020
Nike temporarily closes stores in the US, Canada, Western Europe, Australia, and New Zealand as the pandemic accelerates.

March 24, 2020
Donahoe impresses analysts on first earnings call with his cool handling of the pandemic. He stresses the soundness of Nike’s “playbook” to navigate the chaos.

June 25, 2020
Nike reports a $790 million quarterly loss.  On a call with analysts, Donahoe first mentions his Consumer Direct Acceleration plan, which focuses on direct and digital sales.

July 22, 2020
Donahoe announces a sweeping reorganization thanks to Consumer Direct Acceleration. By year’s end, Nike will eliminate over 700 jobs, racking up as much as $250 million in termination costs.

Aug. 24, 2020
The analyst Sam Poser reports Nike cut ties with midsized retailers like Dillard’s, thanks to DTC push.

March 24, 2021
Reports surface of Chinese consumers burning Nike shoes after the company releases a statement opposing forced labor of Uyghurs in the Xinjiang Uyghur Autonomous Region.

Aug. 10, 2021
Nike changes executive-compensation plan after shareholders nearly rejected the salaries of top executives, including Donahoe. After Nike addressed criticisms, shareholders voted to approve the 2021 plan.

Nov. 15, 2021
Nike pauses partnership with Travis Scott after 10 concertgoers die at Astroworld festival. About two weeks later, the fashion designer Virgil Abloh dies.

Dec. 13, 2021
Nike announces the acquisition of the digital-collectibles company RTFKT, part of its emerging metaverse strategy.

Dec. 17, 2021
Nike indefinitely delays its January 10 return to office after widespread criticism from workers.

Dec. 20, 2021
Nike closes 2021 with strong quarterly earnings, despite China-sales headwinds. Nike's market cap is up $75 billion under Donahoe, thanks to a 46% increase in the company's stock price, ahead of the overall market.

A fresh start then a crisis
On Donahoe's first day, January 13, 2020, Nike was still entangled in the fallout from a workplace scandal that erupted in 2018 when claims of a toxic "boys' club" culture were exposed by the Wall Street Journal and New York Times. It was fending off connections to the disgraced coach Alberto Salazar, the former track star whose name once graced a building on the company's 400-acre corporate campus. There were also criticisms from Nike-sponsored athletes about a lack of maternity benefits and allegations of illicit payments to amateur basketball players.
Financially, Nike was about to come up $12.6 billion short of a five-year goal to hit $50 billion in sales by 2020, a goal announced in 2015 by Donahoe's predecessor, Parker. 
Donahoe, then 59, offered a chance for a fresh start. 
While he had been on the company's board since 2014, Donahoe wasn't connected with the scandals. And his résumé, which included a succession of CEO roles — first at the consulting firm Bain, then the online marketplace eBay, and later the cloud-computing company ServiceNow — showed the managerial and digital chops that Nike needed to address seismic shifts in consumer behavior. 
Parker was no corporate slouch, nearly tripling the company's revenue in about 14 years to more than $39.1 billion and overseeing an 800% increase in the company's stock price. But many considered Donahoe's skill set a better fit for the moment. 
While Parker, who now serves as executive chairman, remains popular at Nike, he was characterized by some as aloof and criticized for being conflict-averse. Donahoe's outgoing personality and affable nature, paired with a willingness to make tough decisions, seemed like a necessary tonic.
When he started work, Donahoe embarked on a global listening tour, hitting China and Japan in his first week. He also spent time with the design, innovation, and product teams. The next month, Donahoe took part in a star-studded event in New York City with Nike endorsers, including the late designer Virgil Abloh. 
Current and former employees complimented Donahoe for the listening tour, saying it created goodwill. But early critics noted Donahoe comes across as a "technocrat" who doesn't naturally connect with sneaker culture, a departure from Knight and Parker. 
In the company's 2019 proxy statement, for example, Donahoe listed one of his favorite Nike products as a pair of golf pants, not one of the classic sneakers in the company's archives. 

Nike's 2019 proxy statement. Nike/SEC filings

Seeming unhip to sneakerheads swiftly became the least of Donahoe's problems.
On March 15, Nike closed stores across Western Europe and the United States as the pandemic raged across the globe. 
Even Donahoe's toughest critics credit him for his handling of the early days of the crisis. 
Nike's sweeping response included philanthropic donations, manufacturing protective equipment, closing stores ahead of competitors, and continuing to pay retail workers. It also paid fiscal year-end bonuses despite disrupted sales and profits.
"Pay continuity was big," a former employee said. 
In mid-2020, as the Black Lives Matter movement gained prominence, Donahoe and Nike announced a $40 million commitment to Black communities, and the company's Jordan brand promised a separate $100 million investment. 
In response to ongoing criticism about a lack of internal opportunities for employees of color, Donahoe ramped up the hiring and promotion of diverse candidates. While some current and former employees said Nike still has significant work to do, others said the company has made major strides.
In its most recent corporate responsibility report, Nike said 26.9% of directors or above are racial or ethnic minorities, an increase of more than 5 percentage points in five years. 
"He's done a lot to give voice on some of the social issues," a current employee said. "Nike's trying to push the needle forward, and he seems to be giving the platform to people working on it."

'I have fired so many people in my career'
In June 2020, Nike reported a $790 million quarterly loss, the second largest in company history, mostly due to store closures because of the pandemic. Wall Street had been expecting a small profit.
"It's a big miss," the Edward Jones senior research analyst Brian Yarbrough said at the time. "I don't think anybody out there expected them to have a loss."
On a conference call with analysts that day, Donahoe was ready with a plan. He announced the Consumer Direct Acceleration, a ramped-up version of the company's previous business plan, which focused on growing direct and digital sales. 
The plan included cutting ties with retailers, many of them small businesses that had helped build Nike's brand over decades, a move that some viewed as alienating critical parts of sneaker culture. But its greatest impact fell to the employee level. 
Nike is known for a complex organizational structure. The reorganization Donahoe laid out was meant to cut layers from the corporate bureaucracy and help decisions get made faster, which helps products get to market quicker, and keeps better pace with rapid shifts in consumer tastes. 
It's unclear how many employees Nike laid off as part of the reorganization, but in a mass-layoff notice filed with its home state of Oregon in 2020, the company said it had parted with 700 of its then 12,800 workers at its headquarters, many of them with decades of experience.
Unlike in previous reorganizations, employees weren't given the option to take early retirement or accept lower positions in order to stay with the company, one former employee said. Multiple employees said the layoffs seemed indiscriminate and not reflective of employee skills or value to the company.
"It seemed like a spreadsheet exercise," one former employee said. 
They also noted the contrast with how Knight handled layoffs, which have historically been rare at Nike. 
In 1998, Knight, then the CEO, stood in front of the company's employees with a quivering voice and apologized for laying off 1,600 of the company's 21,800 employees. At the time, Nike had $9.5 billion in annual revenue.
"We were stunned to hear the CEO say it was his fault and he was sorry," said a former employee who was in the audience that day. 
Donahoe's approach, which could come from his familiarity with firings, stood in contrast.
"I have fired so many people in my career," he said in a 2018 talk with Bay Area entrepreneurs. "Remember, I grew up at Bain. For every 10 people we hired, we managed half out within two years, we managed 75% out within five." 
Donahoe's defenders concede the reorganization was a "little cold" but noted it took place during a pandemic, while most people were working remotely at a company known for its meeting-heavy, tactile culture. 
"We had a reorganization that inarguably needed to be done, but it wasn't clean and still isn't clean," a current executive said. "But the issue is any time you do something that big, it's not going to be smooth. It was never that we shouldn't have done it."
Donahoe's defenders also said criticism of the reorganization's execution misses the bigger point: The new strategy is a winner. 
Direct, digital sales come with higher profits. In North America, digital sales increased 40% in the company's most recent quarter, a staggering number for a Fortune 100 company. Direct sales are now 48% of the North American marketplace.
In order to keep driving those gains, Donahoe is investing heavily in technology across the company, a lot of it unseen improvements in the company's supply chain. Nike's also diving into the metaverse and acquiring digital companies, including RTFKT, which is at the forefront of digital collectibles. Recent patent infringement lawsuits against Adidas and Lululemon show Donahoe is willing to spend money to protect Nike's intellectual property, another way he wants to capitalize on the company's technology. 

Donahoe's next big challenge 
As his second anniversary neared, Donahoe once again faced challenges, starting with China. Nike reported a 24% quarterly sales drop in China in December. 
"There clearly is a nationalist movement in China to support Chinese brands, and it's a problem for every brand. Most brands pre-pandemic were getting virtually all of their growth out of China," Matt Powell, a senior advisor for the NPD Group, told Insider. 
It's even more worrisome for Nike given reports of Chinese consumers burning sneakers after Nike said it would not use cotton from the Xinjiang region, where there have been accusations of forced labor. 
China accounted for nearly 19% of Nike's revenue in the most recent fiscal year but more than 48% of income before taxes. Last week, HSBC downgraded Nike to hold from buy, noting the weakness in China. 
"They have to get China right," said Poonam Goyal, a sector head and senior e-commerce and athleisure analyst for Bloomberg Intelligence. 
Donahoe also will need to address the losses of Virgil Abloh and Travis Scott. Abloh died unexpectedly of cancer in November. Nike paused its collaborations with Scott after a tragedy at his Astroworld festival, leaving Nike without two of its hottest endorsers and significant star power as 2022 begins.  
Donahoe will be facing these challenges with a significant loss of institutional knowledge.  At least 20 high-level executives left the company in the first half of 2021 alone. And the departures seem to be picking up speed. At least another 20 director-level executives left in the past three months.
Multiple people likened the situation to losing "1,000 years of experience" in 18 months.
"It's happening at every big company," a current executive said. "It also seems to be happening here now, especially in the technology workforce." 
The company's insistence on keeping its back-to-office plans hasn't helped morale or helped attract new hires, especially in-demand technology workers. 
On December 15, Nike employees received an email saying they'd be required to return to the company's offices on January 11, despite only 54% of employees indicating in an internal survey that the plan gave them enough flexibility. The company reversed course two days later as Omicron spiked. It was one of the last large companies to delay its return-to-office plans.
Employees and analysts said the talent drain could affect Nike's product line, the cornerstone of the business. The NPD Group's Powell said the "innovation pace has really slowed up."
"There really hasn't been any major innovation from them this year," he said. 
While Donahoe has been bullish on earnings calls about the company's product pipeline, insiders worried the talent drain will affect product development. It typically takes about 18 months to design new footwear. A former designer said the loss of footwear talent won't be visible on store shelves for at least a year.
"You'll start to see it probably around fall or holiday of this year," the former designer said. "You'll definitely see it next year in spring and summer '23." 
What Donahoe does next will be crucial, Nike watchers say. 
"He's at that point where he needs to figure out what's critical for the success of the company," a former employee said. "You didn't get to where Nike is without having that intangible thing that you're not going to read about in a business book. It's that magic. He needs to figure out how to preserve that."
Do you work at Nike or have insight to share? Contact reporter Matthew Kish via the encrypted messaging app Signal (+1-971-319-3830) or email (mkish@insider.com). Check out Insider's source guide for other tips on sharing information securely.

So well said…. He was brought in to lead and his first major decision to re-organize and lay off so many talented people with rich history in the brand was blamed on “well, I did a global trip and this is what you told me you wanted!” It’s like sending your kid outside without a coat in the snow because they asked you to and then shrugging your shoulders when bad things happen and blaming it on the kid.

The best thing this company could do is get rid of him. For some reasons out of his control and many within, he represents some of the worst times in the history of Nike employment. He laid off a heap of talent and blamed the employees that remained for this decision. He’s made several tone def statements in regards to the embarrassment of the SNKRS scandal and even the severity of COVID. He brings none of the heritage or authenticity that previous leaders had to inspire and create an environment that employees enjoy. The focus on “digital” lacks substance and has taken the soul of the company, leaving anyone that works in actual product feeling like a paper pusher.
This company will not get better with him