Nike Overhauls Company Structure, Will Lay Off 2 Percent of Workforce

Nike KD10 Anniversary
Nike KD10 "Anniversary"
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Athletic giant Nike Inc. announced the introduction of its Consumer Direct Offense today, which the company said will help it better serve its customers personally and at scale. To accomplish this, the company explained that it hopes to accelerate innovation and product creation, as well as move closer to consumers in key cities.

But in implementing Consumer Direct Offense, it will also cut 2 percent of its workforce, Nike said in a statement.

“The future of sport will be decided by the company that obsesses the needs of the evolving consumer,” Mark Parker, Nike’s chairman, president and CEO, said in a statement. “Through the Consumer Direct Offense, we’re getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.”

Nike announced that brand president Trevor Edwards will lead the teams of the Consumer Direct Offense, which include integrated category, geography, marketplace, product, merchandising, digital and direct-to-consumer units.

The key cities the new business plan will follow — 12 in total, representing more than 80 percent of the brand’s projected growth through 2020 — are New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan.

With the emphasis on key cities also comes a restructuring of its geographical operating segments, which will be reduced from six to four: North America; Europe, Middle East and Africa; Greater China; and Asia Pacific and Latin America.

Tom Peddie will assume the role of VP and GM of North America; Bert Hoyt will take over the VP and GM of Europe, Middle East and Africa; Angela Dong will become the VP and GM of Greater China; and Ann Hebert is now the VP and GM of Asia Pacific and Latin America.

Nike stated that its financial results will be reported based on these operating segments beginning in fiscal 2018.

To further boost its plan, Nike will employ a new strategy that aims to accelerate innovation, speed to market and directions with consumers. The brand will reduce styles by 25 percent and offer a deeper selection of its key franchises, cut product creation cycle times in half and bring together its online store, DTC retail and Nike+ digital products to expand its membership experience on a global scale.

As of 10:50 a.m. ET, Nike’s shares were down 2.6 percent to $53.22. The company reports earnings results for the fourth quarter and full year on June 29.