Nike to Lay Off 775 Employees as U.S. Distribution Centers Automate

• The layoffs primarily affect distribution center staff in Tennessee and Mississippi, where Nike's facilities had ballooned under the previous CEO's direct-selling strategy but now lack volume to support current staffing levels
• Nike's net income fell 32% in December results due to tariffs, turnaround costs, and a slowdown in China, pressuring the company to reduce complexity and improve margins
• The job cuts reflect broader industry trends toward automation, similar to UPS cutting 48,000 roles last year, as Nike invests in advanced technology to create a more responsive supply chain

Summary: Nike to Lay Off 775 Employees as U.S. Distribution Centers Automate

Nike is cutting 775 jobs, primarily at U.S. distribution centers in Tennessee and Mississippi, as part of an accelerated automation strategy aimed at improving profitability and operational efficiency. These layoffs are separate from previous workforce reductions announced last summer.

Key Details:

The company states the cuts will "reduce complexity, improve flexibility, and build a more responsive, resilient, responsible, and efficient operation." Nike plans to accelerate advanced technology and automation deployment while streamlining its supply chain footprint. The layoffs reflect overstaffed distribution facilities that lack sufficient volume to support current staffing levels, resulting from the company's previous direct-to-consumer strategy expansion.

Strategic Context:

CEO Elliott Hill is leading a turnaround effort after years of declining sales and shrinking margins under former CEO John Donahoe's direct-selling approach, which prioritized Nike's own channels over wholesale partners. Hill's strategy focuses on rebuilding wholesale relationships, clearing excess inventory, and reinvigorating product innovation.

Financial Performance:

Nike's December earnings report showed net income dropped 32%, attributed to tariffs, turnaround costs, and weakness in the critical China market.

Industry Trend:

The move aligns with broader retail logistics automation. UPS previously announced 48,000 job cuts partly due to increased automation, signaling a sector-wide shift toward technology-driven distribution operations.

Market Implications:

The restructuring indicates Nike's commitment to margin improvement and operational discipline as it pursues "long-term, profitable growth." Investors should monitor progress on wholesale partner restoration and automation ROI amid ongoing market headwinds.