Nike is expanding its restructuring under Chief Executive Officer Elliott Hill, announcing further job cuts and changes to its global operating structure as weak performance in China weighs on the sportswear
giant’s outlook.
As per a report by Reuters, Nike’s shares fell 8.5% in extended trading after the company forecast a high-single-digit decline in revenue for fiscal 2027, significantly below analysts’ expectations.
The company also reported a 26% constant-currency decline in sales in China during the first quarter.
China weakness adds pressure
Nike has spent the first two years of Hill’s tenure attempting to restore growth by focusing on sports such as running and rebuilding relationships with wholesale retailers.
However, analysts have pointed to a shortage of new and attractive products as a continuing challenge, with increased promotions and discounts affecting the business.
Hill said Nike’s performance business was not yet large enough to compensate for weakness in Nike Sportswear, the Jordan brand and Greater China.
He added that rebuilding these businesses would take time, including through a deliberate reduction in Jordan retro launches.
The company also missed analysts’ estimates for first-quarter revenue and announced changes to its operating model.
New structure and India campus
Nike plans to reorganise its global operations into three regions: the Americas, Asia Pacific and Greater China, and Europe, Middle East and Africa. The company previously operated with four regions.
As part of the restructuring, Nike plans to establish a new campus in India, which it said would provide strong capabilities and access to talent.
The company has not yet determined how many positions will be eliminated. Employees affected by the latest restructuring are expected to be notified in 2027.
The programme builds on earlier workforce reductions and is expected to generate about $2.5 billion in savings through fiscal 2031. Most of those savings are expected to materialise in fiscal 2029 and fiscal 2030.
Nike expects revenue to fall by a high-single-digit percentage in fiscal 2027, while analysts surveyed by LSEG had forecast a decline of about 2%.
The restructuring comes as Hill seeks to revive growth amid continued weakness in China and pressure across several major Nike businesses.
