Wieden & Kennedy last week laid off about 15 employees, many of whom worked on the Nike account, in response to demands from the athletic footwear giant to put the "best" people on the business, sources said.
"We often shake things up and change things as an organization," said Dave Luhr, director of client services at Portland, Ore.-based Wieden.
In conjunction with the downsizing, the agency will move the ESPN account to its New York office to be closer to that client, Luhr confirmed.
The ESPN move is linked to Nike's demand that the Portland office pay greater attention to its account, sources said. Luhr denied that was the case, but noted that the shift of ESPN to New York "helps us on the talent side. We can add fresh faces to the Nike account here. We certainly try to be attentive to our client[s]."
Creative director Stacy Wall will head the ESPN creative team, Luhr said. About 10 new employees will be hired in New York to service the account. The transition is expected to take place over the next few weeks.
Luhr denied rumors that Nike had threatened to reduce its media budget by 20 percent unless the changes were made. Nike is said to be closely eyeing its media spending and hopes to take a more disciplined marketing approach, sources have said.
Nike U.S. advertising director Chris Zimmerman insisted that the changes were not prompted by the client. "They've made some changes. It's their job," he said.
Zimmerman also denied that any new assignments would be shifted to its second agency, Goodby, Silverstein & Partners in San Francisco. Goodby joined the Nike roster earlier this year.
--with Joan Voight and Jane Irene Kelly