Nike plans to reduce its workforce as part of its latest restructuring programme, with the sportswear giant targeting approximately $2.5 billion in cumulative savings through fiscal 2031.
The company has not disclosed how many roles will be eliminated, but said its Pace operating model overhaul will change the size and structure of its workforce as Nike seeks to streamline operations, reduce duplication and redirect resources to priority areas.
Nike President and Chief Executive Officer Elliott Hill outlined the workforce changes during the company’s earnings call.
“And the final part of Pace is enhancing the way we work across Nike, which will change the shape and size of our workforce,” Hill said.
Hill said Nike will add capabilities in some areas and eliminate duplication in others.
“Over time, those changes will reduce the overall number of roles across Nike, Inc.,” Hill noted.
Layoffs under Pace
The workforce reductions form part of Pace, a broader operating model overhaul that builds on the cost realignment plan Nike announced in March 2026.
Nike expects approximately $2.5 billion in cumulative savings from the programme through fiscal 2031, before charges and reinvestment. The company expects the majority of these savings to come through in fiscal 2029 and fiscal 2030, with full realisation continuing into fiscal 2031.
Pre-tax charges linked to Pace are expected to total about $1 billion through fiscal 2031, primarily from employee-related costs. This is in addition to around $300 million in severance costs recognised in fiscal 2026.
Nike expects to recognise approximately $300 million of the additional charges in fiscal 2027.
The company said the estimates are subject to factors including local legal requirements across different jurisdictions.
Workforce restructuring
Chief Financial Officer Dave Denton said Nike has already begun taking action under Pace and plans to reinvest part of the savings into the business.
The restructuring will also change how Nike organises its global operations. The company plans to combine North America and Latin America under the Americas, while Asia Pacific and Greater China will form a new APGC geography. EMEA will retain its current structure.
Teams are expected to move into the new geographic structure in fiscal 2028.
“We’ll reduce layers and move more resources to the countries, territories, and cities and give our local teams more ownership of winning in their markets,” Hill said.
Nike is also establishing a new campus in Bengaluru, India, staffed by full-time employees across several functions who will work with teams around the world.
Business under pressure
The workforce reduction comes as Nike continues to navigate weaker demand across several parts of its business.
Nike reported first-quarter fiscal 2027 revenue of $11.2 billion, down 4% on a reported basis and 5% on a constant currency basis. Net income fell 2% to $712 million.
Nike Direct revenue declined 8% to $4.1 billion, driven by a 13% decline in Nike Brand Digital and a 5% fall in revenue from Nike-owned stores.
Greater China remained one of the company's biggest challenges, with revenue falling 22% on a reported basis and 26% on a constant currency basis to $1.18 billion.
Nike said it will continue reducing supply across parts of the business, particularly Nike Sportswear, Jordan Brand and Greater China. These actions are expected to put pressure on revenue through the remainder of fiscal 2027 and into fiscal 2028.
Turnaround takes time
Hill said Nike's turnaround would require sustained changes across its global operations.
“At our size and scale, meaningful change takes time,” Hill said. “Our turnaround is happening one sport community, one city, one country at a time, and we are reallocating resources against our biggest opportunities.”
Nike's Performance business grew at a high single-digit rate during the quarter, supported by running, global football, tennis and golf. However, the company said this was not yet enough to offset weakness in Sportswear, Jordan Brand and Greater China.
Nike expects fiscal 2027 revenue to decline in the high single digits and forecasts adjusted diluted earnings per share of $1.15 to $1.35. The forecast excludes around $0.15 per share in restructuring expenses related to Pace.
Analysts expect prolonged cuts
Analysts at BNP Paribas said Nike's rightsizing could continue for several years as the company works through its latest restructuring.
The analysts described Pace as Nike's third restructuring programme since fiscal 2024 and said the first two programmes had cost a combined $828 million.
“We’ve seen no operating leverage,” the analysts wrote.
BNP Paribas lowered its price target for Nike to $19 from $23 and maintained its underperform rating.
The analysts said Nike's forecast for a high single-digit revenue decline could leave around $4 billion in revenue up for grabs for emerging brands including On, Hoka, Salomon and Saucony.
Nike is expected to provide further details on Pace and its long-term growth strategy at its Investor Day in November.