Nike Inc, the global sweatpant giant, has begun laying off an unspecified number of employees in its technology division as part of a broader restructuring effort under new Chief Executive OfficerElliot Hill according to multiple sources. The layoffs are aimed at streamlining operations and shifting certain technological functions to third-party vendors, as the company seeks to reverse declining sales and regain a competitive edge against rivals.
The move comes amid a challenging period for Nike, with its stock down 18% year-to-date as of May 19, 2025, significantly underperforming the S&P 500’s 1.4% gain over the same period.
A Nike representative confirmed the layoffs to Reuters but did not disclose the exact number of affected employees or specific details about the scope of the job cuts. Sources familiar with the matter, cited by Bloomberg, indicated that the layoffs span enterprise and corporate strategy teams within the tech division. The company is reportedly outsourcing some of these functions to external vendors as part of a strategic reset to prioritise efficiency and innovation.
The layoffs are part of a larger turnaround strategy led by Hill, who assumed the CEO role in October 2024. Hill, a 32-year Nike veteran, was brought back to steer the company through a period of stagnating sales and loss of market share to trendier competitors such as On Holding AG and Hoka.
Analysts note that Nike’s previous leadership leaned heavily on lifestyle products, which strained relationships with retail partners and failed to resonate with consumers seeking performance-driven footwear. Hill’s strategy includes refocusing on core athletic products and strengthening ties with retail partners to recapture market momentum.
Nike’s tech division has been a focal point for modernisation efforts in recent years, with investments in digital platforms, supply chain optimisation, and consumer engagement tools. However, the decision to downsize this division suggests a recalibration of priorities, possibly driven by cost-cutting needs amid economic uncertainties.
Nike’s difficult business climate in 2025
The sportswear industry has faced significant headwinds in 2025, including tariff-related uncertainties and shifting consumer preferences. A recent Bloomberg report highlighted how Swiss sneaker brand On, backed by Roger Federer, has been gaining market share from established players like Nike, with first-quarter sales rising 40% to 727 million Swiss francs ($870 million).
Nike’s stock, in contrast, has struggled, despite a 7.3% surge on May 14, 2025, following news of a U.S.-China tariff reduction agreement. The temporary tariff relief provided a boost to retail stocks, including Nike, but has not fully alleviated investor concerns about the company’s long-term growth prospects.
The layoffs also come against the backdrop of broader economic pressures. The U.S. equity investors are closely monitoring trade dynamics, with S&P 500 companies deriving 6.1% of their 2024 revenue from China. Nike, with its significant manufacturing presence in Asia, remains vulnerable to supply chain disruptions and tariff fluctuations. The company’s weak fourth-quarter outlook has further fuelled investor scepticism about its near-term performance.
Industry analysts suggest that Nike’s restructuring is a response to both internal and external challenges.
“Nike is at a crossroads,” said Sarah Jenkins, a retail analyst at Global Market Insights. “The company needs to balance cost efficiencies with innovation to stay competitive in a crowded market. Outsourcing tech functions could free up capital, but it risks diluting Nike’s ability to control its digital ecosystem.”
Jenkins noted that competitors like Adidas and emerging brands have been quicker to adapt to consumer trends, such as the demand for sustainable and performance-oriented products.
The layoffs have also raised questions about employee morale and Nike’s corporate culture, which has historically emphasised innovation and brand loyalty. While the company has not publicly detailed severance packages or support for affected workers, the move has drawn attention on social media platforms like X, where users have speculated about the impact on Nike’s long-term innovation pipeline.
Some posts suggest that the shift to third-party vendors could accelerate certain projects by leveraging external expertise, while others argue it may lead to a loss of proprietary knowledge.
The layoffs have also raised questions about employee morale and Nike’s corporate culture, which has historically emphasised innovation and brand loyalty. While the company has not publicly detailed severance packages or support for affected workers, the move has drawn attention on social media platforms like X, where users have speculated about the impact on Nike’s long-term innovation pipeline.
Some posts suggest that the shift to third-party vendors could accelerate certain projects by leveraging external expertise, while others argue it may lead to a loss of proprietary knowledge.
