A shopper carries a Nike bag in the Union Square neighborhood of San Francisco on January 21, 2026.
David Paul Morris | Bloomberg | Getty Images
Nike The company is cutting 775 employees as the company seeks to improve its bottom line and accelerate its use of “automation,” CNBC has learned.
The layoffs, which are in addition to 1,000 job cuts announced last summer, mainly concern positions in distribution centers in Tennessee and Mississippi, where the sneaker giant operates large warehouses, sources familiar with the matter said.
In a statement to CNBC, Nike said the layoffs primarily affect its U.S. distribution operations and are designed to “reduce complexity, improve flexibility and build a more responsive, resilient, accountable and efficient operation.”
“We are taking steps to strengthen and streamline our operations so that we can move faster, operate with more discipline, and better serve athletes and consumers,” Nike said in the statement. “We are refining our supply chain footprint, accelerating the use of advanced technology and automation, and investing in the skills our teams need for the future. »
It’s unclear how many total jobs Nike has in retail in the United States.
The company added that the reductions were part of Nike’s goal to return to “long-term profitable growth” and improve margins.
As the use of AI and automation spreads across corporate America, jobs in distribution centers are expected to take a hit. Last year, UPS announced plans to cut 48,000 positions, in part because of increased automation at its facilities. It’s unclear how Nike plans to expand automation at its distribution centers and what role that plays in its 775 job cuts.
The layoffs come as CEO Elliott Hill works to turn around Nike after years of slowing sales and shrinking margins. The difficulties arose after former executive John Donahoe pursued a direct sales strategy that prioritized the retailer’s stores and websites over wholesale partners.
Under that strategy, Nike’s distribution centers — and staffing at those facilities — have exploded, but they don’t have the volume to support those staffing levels, people familiar with the matter said.
Under Hill, Nike worked to woo its wholesale partners, clean out stale inventory and reignite innovation. When it reported its fiscal second-quarter results in December, Nike said its net profit fell 32% due to tariffs, costs associated with its turnaround and a slowdown in its key market in China.