Nike plans further layoffs after quarterly sales decline
Nike expanded its restructuring plans after quarterly revenue fell about 4 per cent to 11.21 billion dollars. The new programme includes further layoffs and a reorganisation of its geographic divisions. The company expects about 2.5 billion dollars in savings through fiscal 2031. Job numbers remain undisclosed, with employee notifications planned for 2027 as management forecasts weaker annual sales.
Economics & Markets··Evening
Nike expands restructuring with further layoffs
Nike announced additional layoffs as it widened its restructuring programme alongside first-quarter results on 1 October. The sportswear company also gave a weaker sales outlook for the coming fiscal year.[1], [2]
Chief executive Elliott Hill’s programme will replace four geographic divisions with three: Americas; Asia Pacific and Greater China; and Europe, Middle East and Africa. The company plans employee notifications in 2027. It has not disclosed the number of jobs affected. Nike also plans a new campus in India.[1]
Quarterly revenue falls to 11.21 billion dollars
Revenue at Nike for the quarter ending 31 August fell about 4 per cent to 11.21 billion dollars. Gross margin improved by 60 basis points to 42.8 per cent as warehousing and logistics costs declined. China revenue fell 26 per cent at constant exchange rates, while sales in North America increased 2 per cent on that basis. Shares fell 8.5 per cent in extended trading after the results.[1]
Savings are expected through fiscal 2031
Nike expects the programme to deliver approximately 2.5 billion dollars in savings through fiscal 2031, with most coming in fiscal 2029 and 2030. Management forecasts a high-single-digit revenue decline for fiscal 2027. Hill said growth in performance products was not yet large enough to offset pressure in sportswear, the Jordan brand and Greater China. The company plans to withdraw online selling rights from some major Chinese retail partners from January; Hill said the changes would take multiple seasons and weigh on near-term revenue and profitability.[1]
