Nike announces further restructuring, job cuts, and India campus amid weak China sales

Shares of Nike Inc. are tumbling to fresh lows Friday morning after disappointing first quarter results and layoff plans. The athletics company reported $11.21 billion in revenue, down 4% year over year.  Its revenue failed to meet Wall Street’s expectation of $11.32 billion, according to consensus estimates cited by CNBC. Nike did beat the predicted 43 cents earnings per share, reaching 48 cents earnings per share.  As of this writing, Nike stock (NYSE: NKE) was down more than 8% in premarket trading. Shares have tumbled more than 52% over the last 12 months as of Thursday’s close. ‘Changes to operating model’ on the horizon Looming potentially larger than Nike’s earnings report for its first fiscal quarter of 2027 was its announcement of a new operating model. The plan includes a warning that Nike will be cutting jobs at the company, though it doesn’t say how many or exactly when.  In the announcement, Elliott Hill, president and CEO, said decisions would start in calendar year 2027 and he doesn’t “yet know the number of roles or specific locations of positions.” “The future will belong to companies that can move faster, serve athletes and consumers more locally, and invest more aggressively in innovation,” Hill stated. “To do that, Nike must make changes to become a more agile, efficient and athlete-focused company.” “This work will result in fewer roles across Nike,” he added, “and I want to acknowledge that news like this creates uncertainty.” Nike has already had significant layoffs this year, with the company confirming roughly 775 U.S. job cuts in January. The new operating model also includes splitting its customers into three geographic areas: Americas, APGC (Asia Pacific and Greater China), and EMEA (Europe, the Middle East, and Africa). There will be a new Nike campus in Bengaluru, India.  The plan further involves “supply chain modernization,” a process the company started over a year ago, one that is showing “considerable progress,” according to Hill. Nike shares are trading near a 13-year low Nike’s stock price is among the bottom 10 performers for the S&P 500. Last month, the footwear giant was booted from the S&P 100.

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.Nike, Adidas Say Tariffs An "Existential Threat," Orders Put On Hold China weakness adds pressureNike 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 campusNike 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.

Nike is planning a fresh round of job cuts following a sharp fall in sales in China and a weaker-than-expected first quarter. The company confirmed that it would restructure its global operations and reduce roles from 2027, although it has not yet disclosed how many jobs will be affected. The changes are expected to generate...

NEW YORK, United States  (AFP) — Nike plans to cut an undetermined number of jobs and establish a new campus in India as it seeks to accelerate a turnaround following another downcast quarter. The sports giant unveiled the plan as it reported a modest decline in quarterly profits on lower sales. The company projected sales in the current fiscal year would fall by "high-single digits," according to an earnings statement. "We're building Nike for the long term," Chief Executive Elliot Hill said during a conference call in which he touted the company's burgeoning relationship with women's basketball star Caitlin Clark. Nike reported a two percent drop in quarterly profits to $712 million. Revenues fell four percent to $11.2 billion for the quarter ending August 31, the first quarter of Nike's fiscal 2027. Other than North America, where revenues grew two percent, Nike saw declines in every other region. The sports giant suffered an especially big drop in Greater China, a badly slumping area. In that geography, revenues fell 22 percent to $1.2 billion. Hill also cited the need for improvement in sportswear and the Jordan brand. Hill rejoined Nike as CEO in October 2024 as the company sought a pivot due to problems that included an oversupply of too many items that sold poorly and an ill-conceived shift to direct sales that left the company underrepresented with key retailers. Hill told analysts the company has made progress since his return, but that deeper changes were needed following a comprehensive review. Nike "must make changes to become a more agile, efficient and athlete-focused company," Hill said in a message to employees. These shifts "will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty," said Hill, who promised "transparency" as the plans become clearer. "Decisions about impacted roles related to this work will begin in calendar year 2027 and beyond," Hill said. Nike plans a new campus in Bengaluru, India, which will represent "a long-term investment in new capabilities and talent to strengthen how we serve athletes around the world, including in India," Hill said in the message. Neil Saunders, managing director of GlobalData, said the latest results show "Nike's brand heat continues to fade and it isn't powerful enough to punch back against more nimble competitors." The company's forecast for a further decline in revenues was particularly troubling, said Saunders, who called the outlook "shabby." Shares of Nike tumbled 7.1 per cent in after-hours trading.