Nike to cut about 2% of its global workforce, announces new business structure
"Nike's leadership and organizational changes will streamline and speed up strategic execution," the retailer said in a statement Thursday, explaining plans of how Nike will also change the reporting divisions of its company.
"The changes are ... expected to result in an overall reduction of approximately 2 percent of the company's global workforce," Nike said.
As part of the organizational changes, about 1,400 employees are expected to lose their jobs. Nike had 70,700 employees as of May 31, 2016.
Shares of Nike's stock were falling more than 2 percent Thursday morning following this announcement.
In addition to trimming its employee base, Nike has created what it calls a new Consumer Direct Offense, or what's planned to be a faster pipeline to serve shoppers with customization options.
Trevor Edwards, president of the Nike brand, will head up this division moving forward, the company said.
In the new alignment, Nike plans to focus on serving consumers in 12 cities, across 10 countries, with these locations representing over 80 percent of Nike's projected growth through 2020, the retailer has forecast.
Nike has said it's trying to simplify its geography structure and will change from six to four reporting segments: North America; Europe, Middle East and Africa; Greater China; and Asia Pacific and Latin America.
Financial results for Nike will be reported based on these four operating segments beginning in fiscal 2018, the company said.
"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 CEO Mark Parker said in a statement.
In the footwear and athleisure space, Nike has been seen by many who follow the company as a strong player when it comes to offering customizable product. And Thursday's announcement by the retailer shows it's doubling down on these efforts.
In the coming months there will be a big push toward mass customization, new products and more interesting digital experiences within the business, Nike explained. For example, Nike's Express Lane, which fulfills products in response to consumer demand, will launch in China this summer.
Nike also said it plans to combine Nike.com, its Direct-to-Consumer retail channel, and the Nike+ digital products business. Additionally, it plans to cut the number of its shoe styles by a quarter, focusing on core brands such as ZoomX, Air VaporMax and Nike React.
"This new structure aligns all of our teams toward our ultimate goal — to deliver innovation, at speed, through more direct connections," Edwards added.