Amid slowing sales, Nike announced a new business structure on Thursday morning known as "Consumer Direct Offense," which will result in a two-percent decrease in the brand's global workforce.
According to CNBC, the new changes will account for approximately 1,400 jobs lost and has already caused Nike's stock to fall two percent following the announcement.
The new initiative comes in effort for the Swoosh to better serve consumers, personally, at scale. By using the power of digital, the brand plans drive growth by speeding up innovation and product creation, moving closer to consumers in key cities.
'The future of sport will be decided by the company that obsesses the needs of the evolving consumer," said Mark Parker, Nike, Inc. Chairman, President, and CEO. "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 effort will focus on 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.
In order to move closer to consumers, Nike is essentially 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).
Nike will also continue to push sales on its mobile platforms. Two recent examples of innovative consumer connections are SNKRS Stash, which unlocks access to exclusive Nike and Jordan product using mobile geo-locations; and Shock Drop, surprise alerts for coveted sneakers that allow consumers to buy instantly through the app or at their nearest Nike or retail store. Over the next several months Nike is also launching its Nike+ and SNKRS apps globally to energize the sneaker experience in new markets.
Find out more about the new Consumer Direct Offense here.