Nike Deepens Corporate Restructuring and Forecasts Steep Revenue Drop Amid Persistent Greater China Weakness

Nike is deepening its extensive corporate restructuring under CEO Elliott Hill, announcing further workforce reductions and a significant overhaul of its global business divisions as fiscal year forecasts project a steeper-than-expected revenue drop.

The updated strategy follows a challenging first quarter where overall sales fell four percent to USD11.21 billion, missing consensus estimates, while operations in Greater China plummeted twenty-six per cent on a constant-currency basis.

The deepening downturn across vital international markets underscores the ongoing hurdles facing Hill’s leadership team as they attempt to revive brand momentum through accelerated product innovation and wholesale channel realignments.

Under the newly outlined restructuring programme, Nike will consolidate its operating model into three distinct geographic regions, Americas, Asia Pacific and Greater China, and Europe, the Middle East and Africa, while opening a new operational campus in India.

Although precise headcount reductions remain undetermined ahead of employee notifications scheduled to commence in 2027, the initiative builds on previous cost-reduction measures and aims to deliver approximately USD2.5 billion (AUD3.5 billion) in cumulative savings through fiscal 2031, with the bulk of financial benefits materialising in fiscal years 2029 and 2030.

Concurrently, the sportswear manufacturer anticipates a high-single-digit percentage decline in full-year revenue for fiscal 2027, contrasting sharply with broader market expectations.

Addressing analysts and investors during an earnings call, Hill acknowledged the structural headwinds currently constraining performance across core product categories.

“Our Nike performance business is not yet large enough to offset the pressure we’re seeing in Nike sportswear, Jordan brand, and Greater China,” Hill stated

He also emphasised that returning these segments to sustainable growth will take time.

The turnaround strategy also entails pulling online selling rights from major retail partners in China starting in January to curb deep discounting and restore brand equity, a high-stakes transition that executives warn will temporarily impact regional revenue and profitability across multiple selling seasons.

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