Nike to Lay Off 775 Workers as Automation Reshapes

Nike is laying off 775 people as it seeks to increase its bottom line and accelerate the usage of "automation," according to CNBC. Nike, the sportswear giant, plans to shed hundreds of positions as it consolidates its US distribution center operations. The layoffs, which are in addition to the 1,000 corporate job losses announced last summer, would mostly affect distribution center positions in Tennessee and Mississippi, where the sneaker giant owns enormous warehouses, according to sources familiar with the situation. The corporation stated that the move will have a significant impact on its distribution operations in the United States. It is uncertain how many distribution jobs Nike currently has in the United States.

Why This News Matters:

These layoffs show that even well-known brands can be hurt by changes in the economy and technology. This is about real jobs going away for people who work in Nike's distribution centers, especially in Tennessee and Mississippi, where automation and efficiency are more important. For the larger workforce, it shows a bigger change that is happening: companies are using AI and automation more and more to save money, even though people are worried about how many jobs will be lost.

Company Statements on the Layoffs

Nike told Reuters that it is "taking steps to strengthen and streamline our operations so we can move faster, (and) operate with greater discipline." Nike said in a statement on Monday that the layoffs "are designed to reduce complexity, improve flexibility, and... support our path back to long-term, profitable growth." "We're taking steps to strengthen and streamline our operations so we can move faster, operate with greater discipline, and better serve athletes and consumers," Nike stated. "We are sharpening our supply chain footprint, accelerating the use of advanced technology and automation, and investing in the skills our teams need for the future."

Automation, AI, and Analyst Commentary

"Nike's sales trends over the past two years have been well below normal, so it's highly likely that it overbuilt warehouse capacity and overstaffed," David Swarz, a Morningstar analyst, said. He claimed the changes were "not surprising" given AI's rapidly developing capabilities. As AI and automation become more prevalent in corporate America, distribution center jobs are anticipated to decline. Last year, UPS revealed plans to reduce 48,000 jobs, citing increased automation at its facilities. It's unclear how Nike intends to enhance automation at its distribution sites, or how much of that is reflected in the 775 job cutbacks. The new cuts come as concerns about AI replacing human employment grow louder. A recent study by researchers at the Massachusetts Institute of Technology discovered that AI's skills coincide with more than 11.7% of the US labor market.

Business Performance and Financial Pressures

Nike, whose business is failing, is attempting to reclaim its position as the world's leading sportswear brand after losing market share to competitors. Nike reported a dip in gross margins for the second consecutive quarter in December, citing low sales in China and ongoing efforts to reset its product mix. When Nike reported profits for the fiscal second quarter in December, it stated that net income had declined 32% due to tariffs, turnaround costs, and a downturn in its critical China market. Under Hill, the firm has made significant investments in its sneaker lines, attempting to concentrate the brand on core sports like running and soccer. It also recently experienced a data breach, with hackers releasing a goldmine of company data.

Leadership and Turnaround Strategy

The layoffs come as CEO Elliott Hill attempts to turn around Nike after years of declining sales and margins. In August, it reduced its corporate personnel by slightly less than 1% as part of its turnaround efforts under CEO Elliott Hill, who took over the top role in 2024. It has earlier indicated that it would slash 2% of its workforce, or more than 1,600 positions, in February 2024. Nike made prior layoffs in 2024 and last year, and will reduce its corporate personnel by 1% in 2025 as part of its realignment plan under Hill. The move is part of CEO Elliott Hill's bigger comeback plan, dubbed as the "win now" approach, which aims to revive Nike's revenue growth. The difficulties arose after former CEO John Donahoe pursued a direct selling strategy that favored the retailer's stores and websites over wholesale partners. As part of that approach, Nike expanded its distribution hubs and workforce. Nike has 77,800 employees worldwide, including retail and part-time workers, according to its most recent annual report, published in May 2025. In May, the corporation employed approximately 77,800 employees worldwide.