Nike Announces ‘Pace’ Restructuring Amid Deepening Sales Decline
Nike, the world’s largest sportswear manufacturer, is currently navigating a significant crisis. The company recently reported Q1 revenues of $11.21 billion, falling short of the anticipated $11.32 billion. Alongside this, Nike revealed a comprehensive four-year restructuring plan, dubbed “Pace”, which will encompass job reductions and substantial geographic realignment.
Under the leadership of CEO Elliott Hill, Nike now predicts a high-single-digit percentage decline in full-year revenues for fiscal 2027. This projection is more severe than what analysts had initially estimated. The most significant strain comes from China, where the revenues from the Nike brand have plummeted by 26% on a constant-currency basis during the quarter. Additionally, the company’s sportswear and Jordan Brand segments have also underperformed.
The Pace initiative will see Nike restructuring through 2031. The company plans to consolidate from four geographic regions into three — Americas, Asia Pacific & Greater China, and EMEA. It also aims to modernize its supply chain and inaugurate a new campus in India. This extensive overhaul is projected to yield $2.5 billion in cost savings over four years, including $1 billion in employee-related expenses. The layoffs, which will affect an undisclosed number of roles, are scheduled to commence in 2027. Following this announcement, Nike shares experienced a roughly 3% drop in after-hours trading.
In 2026 alone, Nike’s shares have plummeted by more than 40%. Agile competitors such as On, Hoka, and Anta have seized an increasing market share during this period.