Nike shares tumbled 6.7% Friday after the sportswear giant shared a dismal revenue forecast and warned of upcoming layoffs, as athletes flock to rival sneaker brands.

It was the second straight day of declines for Nike, putting the sneaker brand’s stock down more than 48% so far this year. 

On Thursday, Nike reported that its first-quarter revenues slumped 4% to $11.2 billion, citing declines in Greater China – partially offset by gains in North America – and challenges in its Sportswear and Jordan brands.

Net income was $712 million, down 2% from $727 million the previous year.

It expects revenue to fall by high-single digits in fiscal year 2027 and unveiled a new operating model called “Pace” designed to cut costs – which will lead to more layoffs next year.

“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty. I don’t take that lightly,” Elliott Hill, president and CEO of Nike, wrote in a note to employees Thursday.

“Throughout this process, we will communicate directly, act with transparency and treat people with respect. Decisions about impacted roles related to this work will begin in calendar year 2027 and beyond.”

When Nike introduced its first Air Jordans in 1985, it expected to sell about 100,000 pairs in the first year. Instead, it sold 4 million and the infamous partnership with basketball Hall of Famer Michael Jordan turned Nike into the brand to beat for decades.

But the company has steadily been losing its appeal. A few weeks ago, Madrid striker Kylian Mbappé ended his two-decade partnership with Nike, leaving for rival sneaker brand On. Global soccer stars Lamine Yamal, Harry Kane and Ousmane Dembélé have also cut ties with Nike.

Hill addressed these challenges in a statement, saying: “We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we’re taking deliberate actions to strengthen those businesses the right way for the long-term.”

The new Pace plan is expected to deliver $2.5 billion in cost savings by 2031. Nike did not say how many staffers would be impacted in expected layoff rounds.

The company has already carried out two rounds of layoffs this year, cutting 775 jobs at a US distribution center in January and another 1,400 roles from the tech division in April.

Pace will also include efforts to modernize Nike’s global supply chain; split the company’s business into three geographies; and a new campus in India.

The three geographies will be Americas, combining North America and Latin America; APGC, bringing together Asia Pacific and Greater China; and EMEA, which includes its Europe, Middle East and Africa businesses.

Nike is also opening a new campus in Bengaluru, India, which will “strengthen how we serve athletes around the world, including in India.”

Management is expected to share more details on its five-year outlook at its upcoming investor presentation on Nov. 16 and 17.

Though Nike is still the largest sports brand in the world, it has struggled amid increasing competition from rising brands including On, Hoka, Arc’teryx and New Balance.

On – a running shoe brand launched in 2010 known for its light, cushiony shoes – has posed a particular challenge for Nike. 

The same day Mbappé left Nike, On announced the French soccer player as its ambassador as it enters the soccer market.

In 2020, tennis star Roger Federer – another former Nike partner – helped On launch its first tennis-inspired shoe.

Last month, Nike left the S&P 100 after 18 years.