Nike has announced it will cut 2% of its global workforce as part of sweeping changes to its corporate structure.
Around 1,400 staff are expected to be affected by the cuts, which were revealed in the company’s detailing of its ‘consumer direct offense’, a new initiative designed to get more products into the hand of consumers faster.
The new alignment is aiming to drive growth by accelerating innovation, cutting product creation cycle times in half and increasing the focus on serving key cities.
Discussing the changes, Nike chief executive Mark Parker said: “The future of sport will be decided by the company that obsesses the needs of the evolving consumer.
“Through the Consumer Direct Offense, we’re getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.”
Trevor Edwards, president of Nike brand, has been tasked with overseeing the consumer direct offense.
He commented: “Today we serve our athletes in a changing world: one that’s faster and more personal. This new structure aligns all of our teams toward our ultimate goal—to deliver innovation, at speed, through more direct connections.”
The first of the three key areas which the new strategy will focus on is speeding up innovation. To this end, Nike announced it would reduce its styles by 25% in order to offer a deeper selection of key franchises.
The plans to cut production cycles in half will result in Nike amping up its ‘express lane’ system, which allows it to reduce the design to point-of-sale lifecycle from months to just a few weeks. Already operating in North America and Western Europe, the system will be activated in Shanghai, Seoul and Tokyo this summer.
Overseeing seeing this part of the strategy will be Michael Spillane who takes up the new role of president of categories and product. This area of the business will also be handed more resources to inject into categories highlighted as showing the most potential to fuel growth - running, basketball, women’s training, football and athletes. In an attempt to build on the growth of the Nike Women’s business, a new dedicated women’s team will be assigned to each top-tier category.
The final arm of the consumer direct offense rests on better serving consumers in 12 key cities - New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan. Nike has identified these cities and countries as representing over 80% of its projected growth through 2020.