Nike Plans Job Cuts as Sales Slide

Nike is lacing up for life as a leaner company. After back-to-back quarters of weaker revenue, the sportswear giant said it expects sales to keep sliding through its fiscal year ending May 2027 and will trim operations, cut jobs, and consolidate regional units, the Wall Street Journal reports. CEO Elliott Hill told employees the restructuring will mean "fewer roles," with decisions on layoffs starting in 2027; the company hasn't said how many or where.

Nike projects about $2.5 billion in savings by 2031, but will take roughly $1 billion in pretax charges, largely tied to severance. Revenue dropped 4% to $11.2 billion in the latest quarter, with profit slipping to $712 million. Nike says sales plummeted 26% in China in the first quarter, with a 2% rise in the US, reports Reuters. Nike's shares fell around 10% in after-hours trading and are down more than 40% for the year. Neil Saunders, managing director of GlobalData, says there's nothing "inherently wrong" with the company's restructuring plans, "but they do suggest that Nike's current model is not really fit for purpose, which in turn raises the question of why these changes were not made sooner."