Nike cuts 1,400 jobs in second round of layoffs this year
Technology department bears the brunt as Nike accelerates turnaround amid prolonged sales slump
Briefing
- •Nike announced approximately 1,400 job cuts globally, the majority concentrated in its technology department.
- •This is the second round of layoffs in 2026, following the elimination of 775 positions in January.
- •The cuts are part of a broader turnaround effort aimed at reversing a prolonged sales decline and bringing new products to market faster.
- •Nike's restructuring remains ongoing, with no indication the workforce reduction programme is complete.
Why it matters
- →Nike's second layoff round in 2026, concentrated in technology, signals the turnaround is still in early innings and product velocity has not yet improved enough to justify stabilizing headcount. Elliott Hill's restructuring is consuming organizational capital faster than the revenue line is recovering, which keeps NKE trading on restructuring optionality rather than earnings power. The ongoing nature of cuts also suggests further workforce actions are likely before the company can credibly guide to margin recovery.
- →Lululemon's incoming CEO Heidi O'Neill now inherits a peer that is actively shedding the technology and digital infrastructure she helped build at Nike. Nike's tech-department-heavy cuts reduce the operational credibility of the DTC-first playbook she championed, further undercutting the strategic rationale for her appointment at LULU. If O'Neill attempts a similar DTC acceleration at Lululemon while Nike is visibly dismantling the same architecture, institutional investors will treat it as a high-risk signal rather than a differentiator.
Historical Context
- 2023-2024
Nike's prior restructuring under John Donahoe cut roughly 1,600 jobs in early 2024 as part of a $2 billion cost savings plan. That round also targeted overhead rather than product-facing functions, and did not prevent continued market share erosion to On Running and Hoka, illustrating that cost cuts alone have not historically stabilized Nike's competitive position.
- 2001-2003
After the dot-com bust, multiple consumer and retail companies cycled through repeated layoff rounds as turnaround timelines proved longer than initially guided. The pattern of announcing 'restructuring complete' followed by additional cuts compressed equity multiples across the sector until revenue inflection, not cost reduction, provided the re-rating catalyst.
Connected Events
Lululemon names former Nike executive Heidi O'Neill as CEO
Lululemon's appointment of former Nike executive Heidi O'Neill as CEO, whose DTC strategy at Nike is now being directly unwound through these technology-department layoffs, raises the question of whether her playbook transfers positively to LULU or imports the same structural liabilities.
Meta to cut 10% of workforce, eliminating 8,000 jobs in May
Meta's simultaneous 8,000-person layoff announcement, also framed around efficiency and AI investment reallocation, reinforces a broader corporate labor retrenchment pattern in April 2026 that spans consumer and technology sectors, potentially compressing discretionary consumer spending on apparel if white-collar job insecurity rises.
