Nike Bets $2.5 Billion on a Leaner Machine as Hill's Turnaround Enters Its Hardest Phase

Nike unveils Pace restructuring targeting about $2.5 billion in savings by fiscal 2031 as market value and earnings halve under CEO Elliott Hill.

Nearly two years into Elliott Hill's second stint at the helm, Nike is asking investors for something in short supply: patience. Since the CEO returned in October 2024, the sportswear giant's market value and earnings have both been cut by more than half, and the recovery is dragging on far longer than the market had hoped. In German trading on Friday, the stock closed at EUR 30.10, down 42% year to date.

The company's answer is Pace, a multi-year transformation program unveiled this week that pairs deep cost cuts with a sweeping geographic overhaul. Management is targeting roughly $2.5 billion in cumulative savings by fiscal 2031, with the bulk of those benefits landing in fiscal 2029 and 2030. Getting there won't be cheap: Nike expects about $1 billion in pre-tax charges by fiscal 2031. Reuters reports that the precise headcount figures and affected locations of the latest round of job cuts have yet to be finalized, with impacted employees to be notified during 2027. The move follows roughly 2,100 positions already eliminated in the first half of 2026.

Three Regions, Two Hubs, One Deadline

Under the reorganization, Nike's existing sales structures will be consolidated into three units: the Americas, EMEA, and APGC, which bundles Asia-Pacific with Greater China. The APGC region will be run out of Singapore. By fiscal 2028, the company also intends to open a shared campus in Bengaluru, India, housing operations and support teams for Nike, Jordan, and Converse.

Control over distribution is tightening alongside the map. Longtime retail partners Topsports and Pou Sheng are set to lose their online sales rights effective January 1, 2027, a move designed to pull Nike's digital presence closer to its own brand stewardship. The shift comes after Greater China revenue logged nine consecutive declines.

Scarcity as a Strategy

Hill's plan also rewrites the playbook on product. After years of flooding the market with lifestyle and retro silhouettes, Nike will deliberately throttle both volume and release frequency on select Jordan Retro models to rebuild the brand's exclusivity — a response to heavy discounting and excess inventory that had eroded its premium positioning.

The damage in the core segments is already visible. Jordan, which accounts for about 13% of global revenue, saw sales fall by a mid-teens percentage last quarter. The Dunk line fared worse, with revenue nearly halving and dragging roughly $200 million off the Sportswear division. Nike Direct, the company's own direct-to-consumer channel, shrank 9% to $4.1 billion.

There is a bright spot: Nike Performance posted gains, though the board cautioned that the segment cannot yet fully offset declines elsewhere or in the Chinese market. The first redesigned product lines are expected on shelves in spring 2027.

Wall Street Splits as the Clock Ticks

Analysts are not of one mind. RBC's Piral Dadhania urged caution, warning that conditions may deteriorate further before any recovery takes hold. Bernstein took the opposite view, calling the stock cleaned up after its correction and reiterating an Outperform rating with a $45 price target.

The market's verdict on Friday was less ambiguous: the shares shed 3.6% to close at EUR 30.10. With the projected savings from the restructuring mostly back-loaded into fiscal 2029 and 2030, the horizon for tangible operational improvement keeps sliding further out — even as Nike leans back into functional running products, a category where rivals have been steadily gaining ground.

That makes November 16 and 17 the date to circle. At a two-day investor event, Hill will have to lay out in detail how the combination of product scarcity, regional consolidation, and renewed research focus will actually deliver the turnaround.