Nike Expects To Eliminate 2% Of Global Workforce

(RTTNews) - Nike Inc. (NKE) said Thursday that it expects to eliminate 2% of its global workforce as a result of a corporate restructuring. It plans to focus on serving consumers in 12 cities, across 10 countries. Nike will change from six to four reporting segments. It will reduce its styles by 25 percent. It is on a path to cut product creation cycle times in half.

Nike said it introduced the Consumer Direct Offense, a new company alignment that allows Nike to better serve the consumer personally, at scale.

"Through the Consumer Direct Offense, we're getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever," said Mark Parker, NIKE, Inc. Chairman, President, and CEO.

"Nike's leadership and organizational changes will streamline and speed up strategic execution. The changes are also expected to result in an overall reduction of approximately 2 percent of the company's global workforce," the company said.

Trevor Edwards, President of the NIKE Brand, will drive the Consumer Direct Offense through integrated category, geography, marketplace, product, merchandising, digital, and direct-to-consumer teams.

In the new alignment, the company will drive growth by deeply serving consumers in 12 key cities, across 10 key countries: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan. These key cities and countries are expected to represent over 80 percent of Nike's projected growth through 2020.

Nike stated that it is moving closer to the consumer—creating a local business, on a global scale. To improve efficiency, all key cities and countries are supported by a simplified geography structure, changing from six to four—comprised of North America; Europe, Middle East and Africa (EMEA); Greater China; and Asia Pacific and Latin America (APLA). The leaders of the newly-formed geographies are: Tom Peddie VP/GM of North America, Bert Hoyt VP/GM of EMEA, Angela Dong VP/GM of Greater China, and Ann Hebert VP/GM of APLA.

The financial results for the NIKE Brand will be reported based on these four operating segments beginning in fiscal 2018.

The geography leaders will report to Elliott Hill, President of Geographies and Integrated Marketplace.

Nike is editing to amplify — reducing its styles by 25 percent, and offering a deeper selection of key franchises.

Nike stated that it is on a path to cut product creation cycle times in half. That starts with the Express Lane, which quickly creates, updates and fulfills products in response to consumer demand. Already operating in North America and Western Europe, a new Express Lane will be activated this summer in China, serving Shanghai, Seoul and Tokyo—some of the world's most promising markets for sport.

Michael Spillane is assuming the new role of President of Categories and Product—leading an end-to-end design-to-delivery organization, including Categories, Design, Product and Merchandising.

Nike said it is creating the new Nike Direct organization, led by Heidi O'Neill, President of Nike Direct, and Adam Sussman, Chief Digital Officer. This organization will unite Nike.com, Direct-to-Consumer retail, and Nike+ digital products to enhance and expand Nike's membership experience on an increasingly global scale.

The company said the team will unite physical and digital retail to serve consumers with the best of Nike. Over the next several months, Nike is also launching its Nike+ and SNKRS apps globally to energize the sneaker experience in new markets.