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The Nordstrom flagship store in Seattle. (Flickr Photo / @taylor.a)

A pair of Nordstrom technology executives are leaving the company, and the chief technology officer plans to reorganize the retailer’s digital division in the latest shakeup of the Seattle-based company’s tech initiatives.

The plans are detailed in internal memos obtained by GeekWire. Nordstrom confirmed the changes to its tech teams in a statement. The company said the executive departures are not related to the reorganization.

Edmond Mesrobian. (Nordstrom Photo)

Edmond Mesrobian, a veteran of grocery retailer Tesco and online travel giant Expedia who joined Nordstrom as CTO last year, sent out a memo to employees this week announcing plans to implement “structural changes that will create better alignment and centralization of talent around specific domains and align them against our biggest priorities.”

According to the memo, these changes will lead to a small but undisclosed number of layoffs.

Nordstrom’s digital efforts have gone through a series of fits and starts over the years, including reorganizations and layoffs in the past. The iconic Seattle retailer is facing additional challenges from next door neighbor Amazon, which is increasingly moving into the fashion and apparel business. Like many other longstanding traditional retailers, Nordstrom has grappled with the e-commerce revolution and is working on ways to use digital to bolster and complement its network of brick-and-mortar stores.

In the memo, Mesrobian writes that Travis McElfresh and Magali Muratore, both senior vice presidents of technology, will leave the company:

As part of our efforts to continually evolve to serve our customers, we are making changes to how our technology team is structured. Specifically, we are aligning resources to help better anticipate and respond to the needs of our customers. As part of these changes, some technology employees will be taking on new roles. Unrelated to the restructuring, Magali Muratore and Travis McElfresh have made the decision to pursue personal and professional opportunities outside of the company.

In the memo, Mesorbian lays out his top priorities for Nordstrom’s technology division going forward:

We must work in a way that allows us to be agile, to test and learn our product innovations, and be nimble and fast to respond to changes in customer trends. We must deliver rich connected experiences that delight our customers on their terms. Finally, we must be insights-driven, to sense and capture environmental signals from across our retail estate and transform these signals through artificial intelligence models into actions to empower better decision making and personalized experiences for our customers.

Prior to bringing on Mesrobian last year, Nordstrom laid out a plan to establish itself as the “best fashion retailer in a digital world.” The crux of the plan is to weave together smartphone-based shopping features with the in-store experience to speed up what it calls the “customer journey.”

Historically, the customer connections and conversations about style decisions that Nordstrom prides itself on have happened in brick-and-mortar stores. But many of its new initiatives focus on starting those conversations on a mobile device and carrying them over to the store.

Nordstrom has shuffled its technology leadership a few times over the last three years and made a couple key acquisitions to find the right formula. Mesrobian, whose resume also includes a stint as CTO at Seattle-based RealNetworks, replaced Kumar Srinivasan, a former Amazon manager. He left the company after less than a year as CTO in January 2017.

In December, Michael Mai, a long-time Expedia executive who also spent three years at Microsoft, joined Nordstrom as a vice president of technology, supply chain, to “manage & lead the supply chain transformation initiatives,” according to his LinkedIn profile. In concert with the changes to the technology teams, Mai outlined a reorganization of supply chain teams to “align for better teamwork and better delivery.”

Nordstrom reported net sales of $15.48 billion in 2018, up 2.2 percent from the year before. About 30 percent of net sales in 2018 came from digital transactions, up from 27 percent the year before.

In the holiday quarter, Nordstrom beat expectations for profits but came up short in revenue. Nordstrom stock is down about 3.8 percent so far in 2019. The company had 379 stores as of Feb. 2, up from 366 at the same time the year before, including 115 full-line stores in the U.S. and 238 Nordstrom Rack locations. Nordstrom has announced plans to open seven more stores this year, including five Nordstrom Rack locations.

Here is the full memo about the restructuring of the company’s technology divisions:

Team,

Technology is a core function of our business and the role we play is more important than ever in helping us deliver on our business priorities.

Our Technology Operating model centers on four themes: customer-led, agility and speed, insights driven, and connected experiences. We must work in a way that allows us to be agile, to test and learn our product innovations, and be nimble and fast to respond to changes in customer trends. We must deliver rich connected experiences that delight our customers on their terms. Finally, we must be insights-driven, to sense and capture environmental signals from across our retail estate and transform these signals through artificial intelligence models into actions to empower better decision making and personalized experiences for our customers.

As we enter into this new way of working, I want to share that Magali Muratore and Travis McElfresh have each decided to leave the company and will work with me to transition their organizations. I want to thank Magali and Travis for their contributions and we wish them well as they embark on their next chapters.

Magali’s last day is targeted end of March. In the interim, Alan John, John Keane, Patrick Welch, Ben Sanscartier and Sunil Srivatava will report directly to me. Travis’ last day is targeted for early April at which point he will be going on paternity leave to support the arrival of his daughter. In the interim, I will directly support Jeff Raffo, Jesse Kinkead, Ken Schow, Colby Dean and Mike Stalnaker.

As a Technology Leadership team, we looked at where the Technology organization is today and identified some key refinements that enable us to better execute through the operating model above. We have decided to make some structural changes that will create better alignment and centralization of talent around specific domains and align them against our biggest priorities to ultimately improve synergies and efficiencies across our organization. These changes will support Nordstrom’s future workforce needs, provide clearer lines of accountability, greater connection, and enhanced collaboration across the technology organization. As part of this process we found work that could be streamlined into existing teams, and as a result some of our Technology employees will be leaving Nordstrom at the end of this month. This was a difficult decision and I want to thank all of them for their contributions at Nordstrom.

Effective immediately, the following teams will move to new leadership structures:

  • Loyalty and Customer Authentication and My Account will move to Brian Toba to focus on customer engagement
  • Selling Tools (Rey Gereda) and the NordstromON team will be supported by John Xiao who will oversee all of in-store software platforms
  • Gift Cards will be joining the Payments team, supported by Matt Ward
  • Enterprise Authentication/Nordstrom Single Sign-On will move to be supported by Irwan Tjan to support our overall Security goals for privileged account management and system access
  • Asset Management will move to be supported by Irwan Tjan to facilitate a single view of technology (software and hardware) assets across our retail estate needed security patching and compliance efforts
  • Finance Tech Delivery led by Judy Latawiec will join the Credit team under Dylan Hulbert
  • Network Billing will move under Brenda Anderson
  • Productivity Product Management will move to be supported by Lauren Garbutt under JoAnne Kennedy to accelerate our efforts to Office 365 in the cloud
  • The Collaboration Engineering team will be supported by Kristin Mauck
  • BOPUS, OneFill, mFill will move to Supply Chain, led by Michael Mai, to combine our efforts to accelerate our omni-channel fulfillment goals
  • Service Desk, Conferencing, CTS and Depot will move to be supported by Colby Dean
  • Service Management (ServiceNow and Pager Duty) team will move to be supported by Mike Stalnaker
  • Business Process Automation (K2), APIM/Traffic Mesh team will move to be supported by Jeff Raffo
  • The ESB team will move to various parts of the Technology organization to accelerate the replacement of our current Tibco-based solution

Each of the leaders have communicated the changes to their teams and impacted employees. Here is an updated org chart to help you navigate the new structure.

With Travis and Magali’s departures, I will be taking time to further assess the Technology leadership structure and how we’ll backfill these roles. Thank you for your continued support as we transform our organization to power JWN’s strategic initiatives and deliver the ambitions we shared with investors this past summer.

Your leaders and managers are available in the coming days to answer any questions you have, I’m looking forward to connecting with you during our upcoming Digital All-Hands on March 6th. As always, please feel free to reach out to me if you have any questions and if I can support you in any way!

Onward,
Edmond

And here is the memo from about changes to the company’s supply chain organizations:

Team,

It’s been just over 3 months for me being with the team now. I’ve had the opportunity to work with many of you (but still not enough) and understand better how we work, where we’re great and where we have room to improve. I am impressed with the level of dedication you have and the passion with which you support each other.

Given that, I’ve heard a lot of suggestions to align for better teamwork and better delivery. Some of these we will action now and some later. As a part of Edmond’s overall changes, we felt it was necessary to compliment his moves with some of our own. These include:

  • Micah Samuels will move from his current role to Senior Principle Program Manager Tech. Micah has been a steadfast, dedicated member of Nordstrom and in Supply Chain for years now. As we take on progressively harder challenges and as Nordstrom prioritizes more strategic work for its supply chain network, it’s clear to me that we need greater focus on bringing together all supply chain perspectives together to succeed: business, operations, and engineering. Micah is a core piece of this move and brings a unique skillset combined with a practical, urgent perspective. He will continue to support all of Supply Chain Tech in this new capacity but will also spend more time ensuring that LOH and WCOC succeed. He will remain supported by me directly. Please join me in congratulating Micah on his new role!
  • That means that Qin Zou, Matt Hornsby, Adam Yuret, Abel Muamar, Gil Colunga will directly report into me for now. All of these folks will continue to work in their current capacities; nothing changes except that I will support them directly for now.
  • Additionally, Paul McCallick and the team support by Paul working on MFill, OneFill, BOPUS will formally join Supply Chain Tech. As you may be aware, Paul and his team have been working closely with our own delivering LME, BOPUS and continue to work on store fulfillment (aka OneFill). This work closely aligns with our own work and we welcome Paul and his team to advance our mission. Please join me in welcoming Paul!
  • In an effort to better our org and sharpen our craft, I am opening up a Director, Program Management role, directly supported by myself. The goal here is to align our practices around project and program management, to bring structure and process in these roles where necessary, and to bring consistency with how we develop and grow our people in this discipline. Recruiting will begin shortly.
  • Finally, we’re very happy to welcome Hitomi Tanimoto into Supply Chain Tech as our EA. She comes with a wealth of Nordstrom know-how and experience and we’re very excited to work with her!

We hope and are confident that with your support, we’ll execute on these changes well and will bring even more success to our team and to Nordstrom. In the next couple of days, I’ll be meeting with the folks directly impacted by the above moves and before the month is over, we’ll meet as an overall team in our quarterly all hands. In the meantime, should you have questions please ping me or your manager directly and we will address as best as possible. As well, I will hold my inaugural office hours next Tuesday March 12 where I hope to start to meet with more of you more formally.

All the best,

Michael

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