Nike plans job cuts after China sales plunge 26%
Nike announced a new round of job cuts and a global restructuring starting in 2027 after its Greater China sales fell 26% in the latest quarter. The company said the restructuring will generate around £1.9bn in savings by fiscal 2031 and sent its shares down 8.5% in extended trading.
Nike will reduce unspecified roles from 2027 and shift from four operating regions to three: the Americas, Asia Pacific and Greater China, and Europe, Middle East and Africa. It also plans to open a new campus in India, cut Jordan retro launches, and withdraw online sales rights from some major wholesale partners in China starting January. In the quarter, North American sales rose 2% on a constant‑currency basis and gross margin increased 60 basis points to 42.8%.
“its performance-focused business was not yet large enough to offset weaker trading across its sportswear, Jordan and Greater China divisions,” Elliott Hill, chief executive said.
“the company would begin providing updated targets through the financial year from November as the restructuring progresses,” Elliott Hill, chief executive said.
Nike has been facing declining sales in Greater China for nine straight quarters and has been under pressure from both international sportswear rivals and domestic Chinese brands. Under CEO Elliott Hill, the company has tried to revive growth by focusing on running and repairing relationships with wholesale partners after previously prioritising its direct‑to‑consumer business.
What we know
The changes are expected to generate around £1.9bn in savings by fiscal 2031.
Sales in Greater China plunged 26 per cent on a constant-currency basis during the quarter, marking the ninth consecutive quarter of declining sales in the market.
Shares in Nike dropped 8.5 per cent in extended trading following the update.
Nike’s first-quarter sales fell around four per cent to $11.21bn, missing analyst expectations of $11.32bn, as continued weakness in China weighed on its performance.
The company confirmed that it would restructure its global operations and reduce roles from 2027, although it has not yet disclosed how many jobs will be affected.