Nike plans more job cuts to boost sputtering turnaround, forecasts steep revenue drop

Nike is expanding its restructuring efforts led by CEO Elliott Hill as its sales in China continue to decline, anticipating a significant drop in full-year revenue. The company announced plans to reduce jobs and restructure its global business divisions following a surprise revenue decrease. Nike's sales in China fell 26% on a constant-currency basis in the first quarter, leading to investor concerns about Hill's turnaround plan.

Shares fell 8.5% in extended trading. The company has attempted to revive growth by focusing on sports like running and rebuilding relationships with retailers, but analysts say the lack of compelling new products has led to increased promotions and discounts. Nike's performance business, impacted by the World Cup, contributed to growth.

The company will also open a new campus in India to better access talent. While Nike does not yet know the exact number of job cuts, the restructuring is expected to save about US$2.5 billion through 2031. Analysts believe that addressing product issues will be crucial for Nike's future performance, especially in China, where sales have fallen for nine consecutive quarters.