Nike plans more job cuts and warns of a sales drop as China revenue falls 26%

Nike is deliberately selling far fewer Dunks, the sneaker that filled a decade of overnight queues and resale apps, and it now says that cleaning up its weakest businesses will cost jobs it cannot yet count. Alongside results that showed sales slipping again, the world’s largest sportswear company launched a restructuring programme called Pace. It will redraw the company’s regional map, open a new campus in India and leave, in Nike’s own words, fewer roles across the company over time.

The consequences reach well beyond Oregon. Nike’s shoes and kits fill sporting-goods chains, independent running shops and football club stores in almost every market MCM covers, and when the brand shrinks, those shelves, discount cycles and supplier orders shrink with it. The company also told investors that sales will fall for the whole year, a far gloomier view than analysts had expected.

In the first quarter of its fiscal year, revenue fell 4% to $11.2 billion, or 5% excluding currency swings, short of the roughly $11.3 billion analysts expected. Earnings of 48 cents a share beat forecasts. The weakness sat in Nike’s own channels: sales through its stores and apps fell 8%, with digital down 13%, while revenue from wholesale partners slipped just 1%. North America, up 2%, was the only region to grow.

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Greater China is the deepest wound. Revenue there fell 22% to $1.2 billion, a 26% drop at constant currency and the ninth consecutive quarterly decline. Nike is cutting off online sellers it considers misaligned and concentrating on Tmall, JD.com, Douyin and its own site and app, a reset chief executive Elliott Hill said will take multiple seasons. For Chinese shoppers that means fewer places to buy the brand online. Laurent Vasilescu, an analyst at BNP Paribas, put the diagnosis bluntly: Nike has a product problem in China, not a channel problem.

The product mix shows a company trading one era for another. Sportswear fell at a low double-digit rate, and Nike cut Dunk sales by nearly half, a headwind of about $200 million. Jordan Brand, 13% of global sales, dropped at a mid-teens rate, and Converse fell 28% to $263 million. Running grew by double digits on the Vomero line, and World Cup demand pushed team kit sales to double those of the previous tournament. “Our Nike performance business is not yet large enough to offset the pressure we’re seeing in Nike sportswear, Jordan brand, and Greater China,” Hill said.

Pace is meant to close that gap. Nike expects about $2.5 billion in cumulative savings by fiscal 2031 and roughly $1 billion in pre-tax charges, mostly employee-related, with $300 million of them this year. Four regions will become three, the Americas, Asia Pacific and Greater China, and Europe, Middle East and Africa, with Asia leadership moving to Singapore, some Beaverton support roles relocating and a new campus opening in Bengaluru. “We don’t yet know the number of roles or the specific locations of positions,” the company said. The programme follows the loss of 775 distribution-centre jobs to automation and about 1,400 technology roles earlier this year.

The plan leaves the hardest questions open. Most of the savings arrive in fiscal 2029 to 2031, years after the charges, and the margin gain this quarter came from cheaper warehousing and logistics rather than stronger demand. Neil Saunders of GlobalData said another restructuring suggests Nike’s current model is not fit for purpose. Shareholders reacted accordingly: the stock fell about 9% before Friday’s open to $59.33, even as Nike kept its quarterly dividend at 41 cents.

The calendar is now fixed. Nike guided for a high-single-digit revenue decline in the fiscal year that ends in May 2027, against analysts’ expectation of a 2% dip, with adjusted earnings of $1.15 to $1.35 a share. It warned that the second quarter carries a drag of about four percentage points from comparisons with last year’s promotions. Decisions on which roles go begin in calendar 2027, and the three-region structure takes effect in fiscal 2028.

Until then, the company that taught a generation to line up for a shoe is asking its own staff to wait in line for something else: an answer on whether their jobs survive the new map.

Tags: layoffs, Converse, Elliott Hill, Jordan Brand, Nike, sportswear

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