Nike announced a fresh round of job cuts and a reorganization into three geographic regions after projecting a high-single-digit revenue decline for fiscal 2027, a forecast that sent shares down 8.5% in extended trading on October 1. The move signals that chief executive Elliott Hill’s two-year turnaround has yet to arrest the slide in Greater China, where sales have now fallen for nine consecutive quarters and dropped 26% on a constant-currency basis in the most recent period.
The numbers behind the forecast
The company expects the restructuring to deliver roughly $2.5 billion in savings through fiscal 2031, with the bulk arriving in fiscal 2029 and 2030. Nike did not disclose how many roles will be eliminated or which functions will be hit; notifications are slated to begin in 2027. Analysts compiled by LSEG had been modeling a roughly 2% revenue decline for the full year, a gap that underscores how much worse management sees the trajectory.
China remains the core problem
Greater China accounts for about 15% of annual revenue and ranks as Nike’s third-largest market. Hill acknowledged on the earnings call that the performance business is not yet big enough to offset weakness in sportswear, Jordan Brand, and China. The company is pulling online sales rights from several major Chinese retail partners starting in January, a bid to control pricing and distribution that Hill warned will take multiple seasons and will pressure near-term revenue and profitability in the region.
Analysts question the timing
Neil Saunders of GlobalData said the restructuring plans are not inherently flawed but raise the question of why they were not undertaken sooner. BNP Paribas analyst Laurent Vasilescu argued in a research note that Nike faces a product problem in China, not a channel problem, suggesting that tighter distribution alone will not revive demand. The company also plans to open a new campus in India as part of the operating-model shift.