Davies has poached The Observer's ad manager, Chris Willis, to replace Rob Atkinson, The Mail on Sunday's head of trading. Atkinson has been moved to Associated Newspapers' sister title Ireland on Sunday to take the ad director role vacated by Davies.
Guardian Newspapers, the owner of The Observer, has promoted The Guardian ad manager, Chris Pelekanou, to the new role of head of display across both The Guardian and The Observer to fill the gap created by Willis' departure.
Willis' move to Associated follows nine years at Guardian Newspapers. He will take up his new position on 8 July.
Davies brought in Willis following his move to The Mail on Sunday two weeks ago to replace the ad director, Sue Dear. The departure of Dear from Associated and the decision not to promote Atkinson to her role caused some surprise in the industry.
Stuart Taylor, the advertisement director of Guardian Newspapers, said Willis' departure was sad news but added: "The appointment of Pelekanou as the head of display gives us an excellent opportunity to look afresh at the way the department operates. We are continually striving to increase the success of the department and this new role is a great step forward."
Davies was unavailable for comment.