Nike has announced a major workforce reduction under its new Pace restructuring programme, which targets USD 2.5 billion in cumulative savings through fiscal 2031, with most of the benefit expected to materialise in fiscal 2029 and 2030.
The company has not disclosed how many roles will ultimately go, with CEO Elliott Hill telling employees that decisions on affected positions will begin in calendar year 2027 and continue beyond then.
Pre-tax restructuring charges linked to Pace are projected at approximately USD 1 billion, driven largely by employee severance and related transition costs. Chief Financial Officer Dave Denton noted that Nike intends to reinvest a portion of the savings back into core business segments to accelerate its turnaround strategy.
The Pace programme will consolidate Nike's four geographic divisions into three, modernise its supply chain, and establish a new corporate campus in India. Under the plan, North America and Latin America will be combined into an Americas division, Asia Pacific will be merged with Greater China, while Europe, the Middle East and Africa will remain as EMEA.
The planned reductions extend several rounds of workforce cuts already under way. In April, the company said it would eliminate about 1,400 jobs, largely in operations and technology, following the elimination of about 775 distribution-centre positions in January.
The downsizing follows soft financial results, including a 4% decline in first-quarter revenue to USD 11.2 billion, largely impacted by significant drops in Greater China and digital sales channels.
Nike said Pace is intended to expand the operating model behind its Sport Offense strategy, which organises teams more closely around individual sports while reducing organisational complexity. Hill's challenge is now to convert the operational savings into stronger products and healthier sales, rather than rely primarily on cost cutting.
Source: CNBC
