Nike CEO Warns of New Layoffs in 2027 Amid Changing Operating Model

Key Points:

• Nike CEO Elliott Hill announced a new operating model called "Pace" aimed at accelerating growth by modernizing the supply chain, realigning geographies from four to three, and streamlining the organization to reduce costs.
• The restructuring will lead to fewer roles at Nike, with decisions on impacted positions beginning in fiscal year 2027 and beyond, though exact numbers and locations remain uncertain.
• Key changes include merging North and Latin America into one geography, combining Asia Pacific and Greater China under APGC with leadership based in Singapore, and establishing a new Nike campus in Bengaluru, India to enhance talent and capabilities.
• Nike expects the Pace plan to generate approximately $2.5 billion in cumulative savings through fiscal 2031, with significant pre-tax charges primarily related to employee costs and severance.
• The announcement coincides with Nike’s Q1 fiscal 2027 earnings report, showing a 2% decline in net income to $712 million and a 4% decrease in net sales to $11.2 billion compared to the previous year.