Supply Chain

Nike to Cut 2% of Workforce

The company plans to focus on custom products in key international cities.
William SprouseJune 15, 2017
Nike to Cut 2% of Workforce

Nike has announced plans to cut roughly 2% of its global workforce and create a “consumer direct offense” that, it says, will rapidly serve consumers with customization options, according to a report from CNBC. Shares of Nike stock fell more than 2% after the announcement.

Nike said it wants to simplify its geographic structure and will focus on customers in 10 countries and 12 cities. The locations represent more than 80% of Nike’s projected growth through 2020, the company said. It will change from six reporting segments to four. Financial results will be reported on the four operating segments beginning in the 2018 fiscal year.

“Nike’s leadership and organizational changes will streamline and speed up strategic execution,” the company said in a statement.

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Said CEO Mark Parker, “Through the consumer direct offense, we’re getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.” The consumer direct offense division will be led by Trevor Edwards, who is currently president of the Nike brand.

The key cities identified in the new alignment are: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan.

In the leisure and athleticwear space, Nike is seen as a strong player in terms of custom product offerings. The moves announced on Thursday are seen as evidence Nike is committing more resources to this tactic.

Nike said it is “on a path to cut product creation cycle times in half.”  The company’s Express Lane manufacturing innovation “quickly creates, updates, and fulfills products in response to consumer demand,” Nike stated. Already operating in North America and Western Europe, a new Express Lane will be activated this summer in China, serving Shanghai, Seoul, and Tokyo, which Nike called “some of the world’s most promising markets for sport.”