Nike restructuring plan: World's largest footwear major announces job cuts, targets $2.5 billion savings

Sportswear giant Nike is preparing for another round of job cuts as CEO Elliott Hill intensifies efforts to turn around the company amid weak sales, particularly in China. The company announced a new restructuring programme on Thursday, October 1, alongside a warning that its revenue could decline by a high-single-digit percentage in fiscal 2027, reported by AFP.

The restructuring, called “Pace”, will include changes to Nike’s organisational structure, supply chain and global operating model. The company said the plan is expected to generate approximately $2.5 billion in cumulative savings through fiscal 2031. However, Nike has not yet disclosed how many employees will be affected. Notifications regarding impacted roles are expected to begin in 2027.

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In a letter to employees, Hill acknowledged the uncertainty surrounding the workforce changes.

“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty. I don’t take that lightly,” Hill wrote.

The latest restructuring comes as Nike continues to struggle with weaker demand and intense competition. Sales in Greater China fell 26% on a constant-currency basis in the fiscal first quarter, marking the ninth consecutive quarter of decline in the region. China contributes about 15% of Nike’s annual revenue and remains one of its most important international markets.

Nike reported first-quarter revenue of $11.21 billion, down 4% from a year earlier and below analysts’ expectations of about $11.33 billion. Net income fell to $712 million from $727 million a year earlier, while earnings per share came in at 48 cents, ahead of market expectations.

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Hill said the company still has significant work ahead in its Sportswear and Jordan businesses as well as Greater China.

“Our Nike performance business is not yet large enough to offset the pressure we’re seeing in Nike Sportswear, Jordan Brand, and Greater China,” Hill said. “We’re taking deliberate actions to strengthen those businesses.”

Under Pace, Nike will reorganise its operations into three geographic regions: the Americas; Asia Pacific and Greater China; and Europe, the Middle East and Africa. The company also plans to establish a new campus in India.