Nike's Converse Cuts Jobs as Sales Plunge to 15-Year Low
February 9, 2026 · by Fintool Agent
Converse-2.36% employees were told to work from home this week ahead of layoffs and restructuring at the struggling Nike-2.36% subsidiary, marking the sneaker giant's fourth consecutive year of significant workforce reductions as the iconic Chuck Taylor brand slides toward its lowest annual revenue in roughly 15 years.
"We also had to make difficult decisions which will include saying goodbye to friends and teammates," Converse CEO Aaron Cain wrote in an internal memo viewed by Bloomberg.
Nike shares fell 2.4% Monday to close at $62.41, extending a brutal stretch that has seen the stock decline 21% over the past year.
The Collapse in Numbers
Converse's Q2 2026 results reveal a brand in freefall. Revenue plunged 30% year-over-year to just $300 million—and the damage extends across every category and channel.
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Total Revenue | $300M | $429M | -30% |
| Footwear Revenue | $255M | $364M | -30% |
| Wholesale Revenue | $143M | $212M | -33% |
| Direct-to-Consumer | $132M | $184M | -28% |
| Gross Margin | 41.3% | 48.3% | -700 bps |
| EBIT | -$4M | $53M | -108% |
The most alarming metric: Converse swung to an operating loss for the quarter. EBIT dropped 108% from $53 million in profit to a $4 million loss. Unit sales declined 26% while average selling prices fell another 5 percentage points due to heavier discounting—a toxic combination of shrinking volumes and deteriorating pricing power.
Traffic to both wholesale accounts and direct-to-consumer stores declined across North America and Western Europe, the brand's core markets.
Ask Fintool AI AgentA Brand in Decline
The current quarter's results accelerate a multi-year slide that has erased nearly half of Converse's peak revenue in just three years:
| Fiscal Year | Revenue | YoY Change | EBIT |
|---|---|---|---|
| FY 2023 (Peak) | $2.43B | +3% | $676M |
| FY 2024 | $2.08B | -14% | $474M |
| FY 2025 | $1.69B | -19% | $240M |
| FY 2026 (H1 Annualized) | $1.2B | -30% | Loss |
At its current run rate, Converse is heading toward approximately $1.2 billion in annual revenue—its lowest level since before fiscal 2018 when the brand generated $1.89 billion.
The problem is structural: Converse remains heavily dependent on its Chuck Taylor All Star, and attempts to diversify into other styles haven't gained traction. "The brand has remained heavily reliant on its Chuck Taylor shoe, while forays into other styles haven't taken hold," Bloomberg reported.
Nike operated 54 Converse stores at the end of fiscal 2025.
Nike's Layoff Streak Continues
Today's Converse restructuring extends Nike's four-year streak of significant workforce reductions:
2023: Rolling layoffs hit multiple departments including human resources, recruiting, and sourcing.
February 2024: Nike announced a 2% workforce cut—more than 1,600 jobs—as part of a $2 billion cost-savings initiative. The cuts included 740 Oregon workers.
August 2025: Under new CEO Elliott Hill, Nike cut just under 1% of its corporate workforce as part of turnaround efforts.
January 2026: Nike announced 775 layoffs at distribution centers in Tennessee and Mississippi as the company accelerates automation.
February 2026: Converse layoffs announced alongside departure of multiple senior executives.
The cuts highlight the challenges facing CEO Elliott Hill, who took over in late 2024 with a mandate to restore Nike's position as the world's leading sportswear brand after years of losing market share to rivals.
Ask Fintool AI AgentManagement's Response
Nike's leadership has acknowledged Converse will be one of the last businesses to recover in its broader turnaround.
"We're resetting the marketplace for Converse under new leadership," CEO Elliott Hill told analysts in December. "We highlighted last quarter that it will take more time to return to healthy growth in Greater China and Converse, and we expect headwinds to continue for the balance of the fiscal year."
CFO Matthew Friend framed the situation bluntly: "While we are encouraged by all of this, as we have said, our progress will not be linear, as each brand, sport, and geography is recovering on a different timeline."
The contrast with Nike's core brand is stark. While Converse revenues fell 30%, Nike Brand grew 1% in Q2 with North America up 9%. Running is leading the recovery, up over 20% and taking market share.
But Converse represents a different challenge entirely—not a cyclical downturn but a potential structural decline in relevance.
Nike's Financial Position
Despite Converse's struggles, Nike's overall financial picture shows mixed signals:
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Total Nike Revenue | $12.4B | $12.4B | +1% |
| Nike Brand Revenue | $12.1B | $12.0B | +1% |
| Converse Revenue | $300M | $429M | -30% |
| Gross Margin | 40.6% | 43.6% | -300 bps |
| Net Income | $792M | — | — |
The company faces significant margin pressure from tariffs, with approximately $1.5 billion in annualized incremental product costs from higher U.S. duties. Management expects this to create a net 120-basis-point headwind to gross margin in fiscal 2026 after mitigation efforts.
What to Watch
Near-term catalysts:
- Converse all-hands meeting expected later this month with more details on restructuring
- Q3 2026 earnings (likely March) for updated Converse trajectory
- Any announcements on Converse store closures beyond the 54 currently operating
Key questions:
- Will Nike consider selling or spinning off Converse? The brand has been a laggard for three years
- Can new Converse leadership revive the brand beyond Chuck Taylor dependence?
- How deep will the layoffs be and what functions are affected?
"The Win Now Actions and the Sport Offense are working, and it will lead us back to profitable, sustainable growth," Hill said in December.
For Converse, that sustainable growth remains elusive—and the workforce is paying the price.
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