Nike is preparing for another round of job cuts as the sportswear giant works through weaker sales and tries to rebuild growth in key markets. The company is also warning that its revenue could fall sharply in fiscal 2027, adding pressure to its ongoing turnaround.
Nike announced the restructuring after reporting fiscal first-quarter revenue of $11.21 billion, below the $11.32 billion analysts had expected. The company also said it expects fiscal 2027 revenue to decline by a high-single-digit percentage.
Nike is combining further workforce reductions with changes to its global business structure as it attempts to lower costs and improve performance.
Why Nike is cutting more jobs
The latest cuts are part of a broader restructuring rather than a single response to one weak quarter.
Nike has been trying to simplify its business, rebuild relationships with retailers and put greater emphasis on performance-focused sportswear. Those changes have required the company to reorganize parts of its global operation.
Reuters reported that Nike expects its restructuring program to generate approximately $2.5 billion in savings through fiscal 2031.
The savings will not arrive immediately. Nike expects many of the benefits to become more visible later in the decade, meaning the company is accepting near-term restructuring costs while trying to improve its longer-term cost structure.
China remains a major problem
One of Nike's biggest challenges is China, where competition and weaker demand have made the turnaround more difficult.
China has historically been an important international market for Nike, but the company has struggled to regain momentum as local brands and other international competitors fight for consumers.
Nike has also acknowledged that its product strategy needs to improve, particularly after relying heavily on older lifestyle products and discounting.
The company wants to rebuild its sports business
Nike is putting greater emphasis on categories such as running and other performance sports.
The strategy is intended to move the company away from an excessive dependence on lifestyle products and promotions.
Rebuilding that part of the business will take time because Nike has to develop new products, strengthen relationships with retailers and persuade customers to return to full-price purchases.
Why the revenue forecast matters
The latest outlook is significant because investors have been watching whether Nike's turnaround can translate into stronger sales rather than simply lower expenses.
Cost reductions can improve margins, but they do not by themselves solve problems involving product demand, competition or brand momentum.
Nike's management therefore faces two related tasks: reduce the cost of running the company while also creating products and marketing strategies capable of bringing customers back.
More layoffs have already happened this year
The latest announcement follows several rounds of workforce reductions.
In April, Nike announced plans to eliminate about 1,400 positions as part of an effort to streamline operations. Earlier in the year, the company also cut hundreds of U.S. distribution-center jobs while increasing its use of automation.
The repeated restructuring shows how extensive Nike's effort has become. The company is changing its workforce, product mix and operating model at the same time.
What consumers may notice
For shoppers, the changes could eventually appear through Nike's product lineup, store strategy and relationships with retailers.
The company has said it wants to reduce excessive discounting and return to stronger full-price demand. That could mean fewer promotions for some products, while newer performance categories receive more attention.
However, the immediate impact will depend on how quickly Nike can improve demand in its largest markets.
What comes next for Nike
Nike's next major opportunity to explain its strategy will come with its investor-focused events and additional financial results.
Investors will be watching sales in China, performance categories, wholesale relationships and the progress of the cost-saving program.
The company has made clear that the turnaround will take time. The challenge now is translating the restructuring into stronger demand while managing the costs of changing such a large global business.
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