March 10th, 2020 – New York
Pandora announced a reorganization plan that will include cutting 180 jobs. The company’s North American headquarters will remain in Baltimore, losing some positions and gaining others, the Baltimore Business Journal reports. In a press release, the Danish jewelry company said the reorganization will “move Pandora closer to consumers and ensure faster and consistent execution with more impactful products and marketing concepts.
Here are additional details from the release:
Flat operating model to drive world class retail execution Pandora will close its three regional organisations thereby eliminating an organisational layer between global headquarters and the local markets. The more than 100 markets where Pandora operates will be grouped into 10 clusters, each headed by a General Manager based in the largest market in the cluster. The General Managers will report to a newly established Chief Commercial Officer (CCO) position. The CCO will report to President & CEO Alexander Lacik and be part of Pandora’s Executive Leadership Team.
The CCO will also be responsible for a retail centre of excellence to improve Pandora’s global retail skills including global merchandising, store development, planning and execution. A new function called Network & Franchise Management will be established to oversee the retail estate and support franchise partners globally. The CCO position will be taken up by a newly appointed external candidate who will be announced shortly and is due to join Pandora early in Q2 2020.
The global organization designed to deliver a brand experience based on deep consumer insights To offer more impactful products and marketing concepts and a more consistent consumer experience across markets, Pandora will establish two Global Business Units with end-to-end responsibility for product performance. One Global Business Unit will have the responsibility mainly for the core products including Moments, Charms and collaborations whereas the other Global Business Unit will drive the newer product categories and innovations. The new units will be accountable for concept development, design, execution and marketing plans across the full value chain – a shift from the current set-up centred around product launches (‘drops’).
The Global Business Units will report to the recently appointed Chief Marketing Officer (CMO), Carla Liuni, who starts on 16 March 2020. As part of the reorganisation, Pandora will invest in building stronger global functions including Marketing, Digital, Merchandising and Business Intelligence. A Global Business Services centre will be established to deliver efficient and scalable transactional processes and drive efficiencies through standardisation and higher quality. These initiatives – to upgrade and long-term future-proof Pandora – follow the already announced decision to establish a Digital Hub in Copenhagen, the appointment of Carla Liuni as CMO, and the appointment of Erik Schmidt as Chief HR Officer. “With today’s announcement, we bring our global headquarters closer to our local markets and consumers, and ensure that feedback from consumers can more quickly fuel new concept creations.
The reorganization will reduce organizational complexity, enable Pandora to execute with more speed and agility, and add critical capabilities required to support growth”, says Alexander Lacik, President & CEO of Pandora. As a consequence of the strategic reorganization, 180 employees from Pandora’s regional offices and markets will leave the company. The three current regional presidents will step down from the Executive Leadership Team. David Allen, currently President of Pandora EMEA will stay with Pandora and support Programme NOW, while Sid Keswani, current President of Pandora Americas, will become President of the North America cluster. Kenneth Madsen, current President of Pandora Asia Pacific, will leave the company. The new organisation will take effect from 2 April 2020.
In terms of financial implications, Pandora stated: The reorganisation will entail additional non-recurring restructuring costs amounting to around DKK 0.2 billion primarily related to severance payments, additional consultancy support, extraordinary recruitment costs, and other costs of closing down the regional offices. The total restructuring costs in 2020 are thereby expected to amount to around DKK 1.3 billion. The cost reductions from the redundancies of 180 employees are expected to be largely offset by costs related to the further strengthening of the global organisation. The net cost savings are consequently expected to be limited. In the new organisation, the management teams in the markets will focus on sales, marketing and retail execution. Consequently, the cost of certain functions in the markets (approximately DKK 0.3 billion annually) previously recognized under Administrative expenses will be re-classified to Sales & Distribution expenses. Other parameters of the financial guidance for 2020 are unchanged.