Nike Lays Off 775 Workers In Shift Towards Automation
Nike plans to lay off 775 employees across US distribution operations as it accelerates automation and consolidates logistics work, according to CNBC, citing people familiar with the matter.
The move marks the third consecutive year that Nike has cut jobs. In August last year, Nike said it planned to cut less than 1% of its corporate workforce as part of efforts to turn around the business under CEO Elliott Hill. Earlier, in February 2024, the company had announced plans to cut 2% of its jobs: more than 1,600 roles.
Nike Layoffs Target Warehouses in Tennessee and Mississippi
The cuts primarily affect roles in Tennessee and Mississippi, where the sneaker giant operates large warehouses. The layoffs are intended to “reduce complexity, improve flexibility, and build a more responsive, resilient, responsible, and efficient operation,” Nike said in a statement to CNBC. “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.”
A a spokesperson also told Fast Company: “These actions are designed to reduce complexity, improve flexibility, and build a more responsive, resilient, responsible, and efficient operation and to support our path back to long-term, profitable growth, including contributing to improved EBIT (earnings before interest and taxes) margins over time.”
Nike switches its strategy
Several outlets have tied the layoffs to financial pressure from slowing sales and compressed margins. Former CEO John Donahoe had prioritized Nike’s owned stores and websites over wholesale partners, which drove expanded hiring at distribution centers to support direct-to-consumer fulfillment.
That strategy ultimately left Nike with more warehouse employees than demand could support. Under new CEO Elliott Hill, the company has reversed course, leaning back into wholesale partnerships while cutting costs and investing in automation to improve margins.
Image credit: GQ
