Nike cuts employment. Fighting for a simpler structure and profitability

The sportswear giant from Oregon is not slowing down in the process of rebuilding its structures. Nike announced a reduction in employment by approximately 1,400 employees, which constitutes nearly 2% of the company's global workforce. This is another wave of cuts in 2026, which sheds new light on the strategic priorities of the new CEO, Elliott Hill.

Although the reductions will affect branches in North America, Asia and Europe, the technology department will be hit the hardest. This decision is directly linked to the new “Win Now” operational strategy unveiled by Chief Operating Officer (COO) Venkatesh Alagirisamy. The key pillars of the new structure are:

• IT centralization – Nike plans to concentrate technology operations in two main hubs – the headquarters in Beaverton and the Nike India Technology Center,
• optimization of the Converse brand – engineering resources of this brand will be moved closer to production partners, which is intended to shorten the time to market products,
• supply chain integration – teams responsible for materials will be more closely integrated with clothing and footwear design departments.

Fight for margin in the face of strong competition

Market analysts note that Nike is struggling with the so-called “excess employment” from the pandemic period, when internal IT departments were aggressively built. The current cuts are intended not only to simplify the structure, but above all to improve profitability in a difficult macroeconomic environment.

Thursday's layoffs are a signal that “the problems are more serious than originally thought,” said Morningstar analyst David Swartz, quoted by Reuters.

Challenges on the horizon

The restructuring is taking place in the shadow of weakening performance in Asia. Forecasts for Nike are not optimistic – the company expects an even 20% decline in sales in China in the current quarter. Additionally, Nike's market share is being eroded by new players, such as On and Hoka, who respond more quickly to changing trends in the running footwear segment.

For investors, the signal is clear: Nike, led by Elliott Hill, is focusing on radical efficiency and automation. The question is whether a lean structure and technology centralization will be enough to regain dominance in the key Chinese market and stem the expansion of younger competition.

Nike shares rose about 0.5% in aftermarket trading. However, this will not be enough to make up for previous losses, because over the last three years these securities have lost more than half of their value.

Prepared by JM

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