Nike plans more job cuts, geographic changes after forecasting sharp revenue drop

The sportswear giant Nike announced plans on Thursday (Oct 1) to cut more jobs and restructure its global business divisions in response to a steep drop in projected revenue for fiscal 2027. CEO Elliott Hill initiated the restructuring efforts earlier this year, aiming to refocus on key sports and rebuild relationships with wholesale retailers.

However, Nike's weaker-than-expected revenue forecast, especially in China, where sales dropped 26 percent in the first quarter, has raised concerns about the pace of Hill's turnaround. Analysts attribute the company's struggles to a lack of compelling products, leading to increased promotions and discounts. Nike's shares fell 4 percent in extended trading following the news.

The company expects to save about US$2.5 billion through fiscal 2031 with the restructuring, which includes job cuts and a shift to three geographic regions: Americas, Asia Pacific, and Greater China and EMEA. Nike plans to open a new campus in India with strong capabilities and access to talent. The company has not yet determined the number of positions that will be cut, with notifications to begin in 2027.

Historically, China has been a profit-driver for Nike, but recent quarters have shown weakness as international rivals and domestic sportswear groups gain market share. Nike has been testing tighter control over pricing and distribution by pulling online sales rights from major retail partners in China, but analysts question whether this drastic measure will convince Chinese consumers to purchase Nike products.