Nike Plans Job Cuts and a Smaller Company as China Slump Deepens

Why this matters: the world's biggest sportswear brand just told investors its turnaround will take years — and the cost will be measured in jobs.

October 3, 2026 — Nike is planning to be a smaller company. After reporting another quarter of falling revenue, the sportswear giant said Thursday it will cut jobs starting in 2027, consolidate its business into three geographic regions instead of four, and accept that its turnaround under chief executive Elliott Hill will take far longer than investors hoped. Shares fell 8.5% in extended trading after the company projected a steep revenue decline for fiscal 2027.

Image: illustration of a giant sneaker on a factory floor with a stock-chart arrow splitting through it, storm clouds and falling red charts overhead. Credit: Red Eye Eagle News / original AI illustration.

Editor's Highlight: Nike's problem is no longer just China — it is that the whole company, from Jordan to Converse to its own direct stores, is shrinking at once, and the fix is now officially a multi-year surgery.

Table of Contents

• Key Facts
• The Earnings That Broke the Turnaround Story
• Pace: The $2.5 Billion Restructuring
• China: The Ninth Straight Decline
• What Analysts Are Saying
• Bottom Line
• FAQ
• Sources

Key Facts

Detail	Information
Quarter	Fiscal Q1 (ended August 31, 2026): revenue $11.21B, down 4% year over year
Profit	Net income $712M, down 2%; EPS $0.48 vs $0.44 expected
China	Sales down 26% on a constant-currency basis — ninth straight quarterly decline
Restructuring	"Pace" plan: job cuts from 2027, three regions instead of four, new India campus
Savings target	~$2.5B in cumulative savings through fiscal 2031; ~$1B in restructuring charges
FY2027 outlook	Revenue down high single digits; adjusted EPS $1.15–$1.35
Market reaction	Shares fell 8.5% after hours; stock down more than 40% in 2026

The Earnings That Broke the Turnaround Story

Nike's numbers told two stories at once. Revenue fell about 4% to $11.21 billion, missing analysts' average estimate of $11.32 billion, according to Reuters. But profit beat expectations: $0.48 a share versus the $0.44 consensus, with gross margin rising 60 basis points to 42.8% on lower warehousing and logistics costs.

The guidance erased the good news. Nike forecast fiscal 2027 revenue will decline by a high-single-digit percentage — far worse than the roughly 2% drop analysts had penciled in — with adjusted earnings per share of $1.15 to $1.35, excluding about $0.15 of restructuring expenses.

The weakness was spread across the business. Nike Direct revenue fell 8%, Greater China and the Europe, Middle East and Africa region posted declines, and Converse recorded its 14th straight quarter of falling revenue. North America was the one bright spot, up 2% on a constant-currency basis, helped by the World Cup.

Newsroom Focus: Beating on profit while missing on sales is the classic late-cycle pattern: cost control can only carry a company for so long. Nike's own forecast now admits the sales recovery is not coming in 2027.

Pace: The $2.5 Billion Restructuring

Alongside earnings, Nike unveiled Pace, a sweeping operating overhaul. The plan has four pillars:

• Fewer roles. In a memo to employees, Hill wrote: "This work will result in fewer roles across Nike." The company says it does not yet know how many jobs will go, and decisions will begin in calendar 2027.
• Fewer regions. Four geographic divisions become three: the Americas, Asia Pacific & Greater China, and EMEA — with Greater China folded into Asia Pacific and Latin America merged into North America.
• A leaner supply chain, modernized for lower cost.
• A new campus in India, which Nike says offers "strong capabilities and access to talent."

The program targets about $2.5 billion in cumulative savings through fiscal 2031 — though most of the savings arrive in fiscal 2029 and 2030 — at a cost of roughly $1 billion in pretax restructuring charges, including about $300 million in fiscal 2027.

Pace target	Figure
Cumulative savings through FY2031	~$2.5 billion
Pretax restructuring charges	~$1 billion
FY2027 restructuring charge	~$300 million
Job-cut decisions begin	Calendar 2027 (number undisclosed)

"I want to acknowledge that news like this creates uncertainty. I don't take that lightly," Hill wrote to staff. "Throughout this process, we will communicate directly, act with transparency and treat people with respect."

China: The Ninth Straight Decline

China remains Nike's deepest wound. Sales there fell 26% on a constant-currency basis — the ninth consecutive quarterly decline in a region that accounts for about 15% of annual revenue and was historically one of its most profitable.

The causes are structural, not cyclical. Local competitors and stronger consumer preference for domestic brands have weighed on demand, and Nike has been deliberately pulling back from third-party websites and reducing promotions. Starting in January, Nike will pull online sales rights from some of its largest retail partners in China — a high-stakes bet that tighter control over pricing and distribution can revive the brand. Hill warned the cleanup will take "multiple seasons" and will hit near-term revenue and profitability.

"Nike does not have a channel problem in China, but rather a product problem," Laurent Vasilescu, a senior analyst at BNP Paribas, said in a research note cited by Reuters — adding that he was surprised by the company's short timeframe for shutting down online wholesale.

Analysis Note: Analysts have also noted the Jordan brand is lagging — Nike has reduced the volume and frequency of retro Jordan launches — while sportswear (about half of revenue) posted a low-double-digit decline. "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 said on the post-earnings call.

What Analysts Are Saying

The verdict on Wall Street was blunt. Poonam Goyal of Bloomberg Intelligence said Nike's turnaround may have "stalled", while Adam Crisafulli of Vital Knowledge called the latest guidance "pretty ugly." Neil Saunders of GlobalData added: "There is nothing inherently wrong with the restructuring plans, but they do suggest that Nike's current model is not really fit for purpose, which in turn raises the question of why these changes were not made sooner."

The market had already been voting with its feet: Nike shares are down more than 40% this year, making it one of the Dow's worst performers, and S&P Dow Jones Indices removed Nike from the S&P 100 in September after 18 years in the blue-chip index. In September, French soccer star Kylian Mbappe also ended his two-decade Nike partnership to join Swiss rival On — a symbolic loss at exactly the wrong moment.

Practical Takeaway: Nike's investor day next month is the next milestone. Investors will want to know where the $2.5 billion in savings goes — back into product innovation to fight Hoka, On and Chinese brands, or into protecting margins while sales keep falling.

Bottom Line

Nike has stopped pretending this is a quick fix. The Pace restructuring — job cuts, fewer regions, a China reset that will take "multiple seasons" — is a multi-year rebuild for a company whose core engine is stalling in its most important growth market. Watch the November investor day: it has to show where the savings go and how Nike plans to win back shelves in China.

FAQ

Why is Nike cutting jobs?

Nike announced a restructuring plan called Pace alongside weak fiscal Q1 results, targeting ~$2.5 billion in cumulative savings through fiscal 2031. CEO Elliott Hill told employees the work "will result in fewer roles across Nike," with decisions beginning in calendar 2027. The number of affected roles is undisclosed.

How bad were the earnings?

Revenue fell 4% to $11.21 billion, missing estimates, though EPS of $0.48 beat expectations and gross margin improved to 42.8%. The real damage was the fiscal 2027 guidance: a high-single-digit revenue decline, far worse than analysts' ~2% forecast.

What is happening with Nike in China?

Sales fell 26% on a constant-currency basis — the ninth straight quarterly decline. Nike is pulling online sales rights from major retail partners starting in January to regain pricing control, but says the cleanup will take "multiple seasons."

What is the Pace restructuring?

A company-wide overhaul: workforce reductions from 2027, consolidation from four geographic regions to three, supply-chain modernization, and a new India campus. Expected to deliver ~$2.5B in savings through FY2031 at a cost of ~$1B in restructuring charges.

How has the stock reacted?

Shares fell 8.5% in extended trading Thursday. The stock is down more than 40% in 2026, and S&P Dow Jones removed Nike from the S&P 100 in September after 18 years.

Sources

• https://wixx.com/2026/10/01/nike-quarterly-sales-miss-estimates-as-china-weakness-competition-weigh/ — Reuters via WIXX, Oct 1, 2026: earnings, Pace restructuring, China decline, analyst reactions
• https://www.btin.co.in/nike-shares-plunge-revenue-120311 — Business Times India, Oct 2, 2026: 8.5% plunge, FY2027 forecast, regional reorganization details
• https://qncnews.com/nike-plans-more-job-cuts-in-2027-as-restructuring-targets-2-5-billion-in-savings/ — QNC News, Oct 2, 2026: Pace savings targets, restructuring charges, India campus
• https://www.wealthprofessional.ca/investments/equity-markets/nike-revenue-slips-4-as-restructuring-sets-up-2027-job-cuts/393678 — Wealth Professional, Oct 2, 2026: SEC filing details, adjusted EPS guidance
• https://www.youtube.com/watch?v=8B4g3UgJ2OM — Dividend Focus, Oct 2, 2026: detailed earnings breakdown video
• Original AI illustration created for this article — hero image above.