Additional Coverage:
Nike Announces Further Layoffs, Focusing on Distribution Centers Amid Automation Push
Oregon-based athletic wear giant Nike is set to cut approximately 775 jobs, primarily impacting its U.S. distribution centers. This move follows an earlier round of 1,000 corporate layoffs last summer, signaling a continued effort by the company to streamline operations and enhance efficiency.
The latest job reductions will largely affect staff at Nike’s major distribution hubs in Tennessee and Mississippi. In a statement, Nike emphasized its commitment to “reduce complexity, improve flexibility, and build a more responsive, resilient, responsible, and efficient operation.” The company also highlighted its intent to accelerate the adoption of “advanced technology and automation” within its supply chain.
This strategic shift aligns with a broader trend across corporate America, where companies like UPS have also announced significant job cuts, partly attributed to increased automation. While the exact extent of Nike’s automation expansion and its direct correlation to the 775 layoffs remains undisclosed, the company stated these measures are crucial for achieving “long-term, profitable growth” and improving profit margins.
These layoffs come as CEO Elliott Hill continues his efforts to revitalize Nike, which has faced challenges including slowing sales and diminishing margins in recent years. A previous strategy under former executive John Donahoe, which prioritized direct-to-consumer sales, led to an expansion of distribution centers and staffing that, according to sources familiar with the matter, no longer aligns with current sales volumes.
Under Hill’s leadership, Nike has been working to re-engage wholesale partners, manage excess inventory, and foster innovation. The company reported a 32% decline in net income for its fiscal second quarter in December, citing tariffs, turnaround costs, and a slowdown in the Chinese market as contributing factors.