Nike is accelerating a sweeping overhaul of its supply chain, cutting 775 jobs across its U.S. distribution network as it leans more heavily on automation and advanced technology to revive margins and restore growth.
The latest layoffs, centered on large warehouses in Tennessee and Mississippi, deepen a workforce reduction that has become a defining feature of the company’s turnaround under CEO Elliott Hill.
The job cuts, first reported by CNBC, come in addition to the 1,000 corporate roles Nike eliminated last summer. Together, they point to a company retrenching after several years of slowing sales, rising costs, and a strategy shift that left parts of its logistics operation larger and more expensive than current demand can support.
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In a statement, Nike said the layoffs primarily affect its U.S. distribution operations and are aimed at “reducing complexity” while building a more flexible and efficient business. The company said it is sharpening its supply chain footprint, expanding the use of automation, and investing in new skills to better serve consumers and athletes.
Behind that explanation lies a deeper strategic reset. Under former CEO John Donahoe, Nike aggressively pursued a direct-to-consumer strategy, prioritizing its own stores and digital platforms over wholesale partners. That approach drove heavy investment in distribution centers and staffing to handle higher volumes shipped directly to customers. As growth cooled and wholesale relationships weakened, those facilities were left with excess capacity.
People familiar with the matter say current volumes no longer justify the staffing levels built up during that period.
Hill, who took over as Nike grappled with shrinking margins and uneven demand, has moved quickly to reverse course. His strategy has focused on repairing ties with wholesale partners, clearing stale inventory, tightening spending, and reigniting product innovation. Distribution and logistics, once scaled for rapid direct sales growth, are now being streamlined to fit a leaner model.
Financial pressure has sharpened the urgency of those moves. When Nike reported earnings for its fiscal second quarter in December, the company said net income had fallen 32%. Management pointed to tariffs, turnaround-related costs, and a slowdown in China, one of Nike’s most important markets. Improving margins has become a central goal, and automation is increasingly seen as a key lever.
While Nike has not detailed the specific technologies being rolled out, its language signals a broader shift toward automated picking, sorting, and inventory management systems that can reduce reliance on human labor. It remains unclear how many total U.S. distribution jobs Nike employs, or how many roles could eventually be affected as automation expands further across its network.
Nike’s actions also sit within a much wider corporate trend. Across retail, logistics, and manufacturing, large employers are cutting warehouse and fulfillment roles as artificial intelligence and robotics move from pilot projects to core operations. Distribution centers, with their repetitive and process-driven tasks, are often at the front line of this transition.
UPS offered one of the clearest examples last year when it announced plans to cut 48,000 jobs, citing increased automation across its facilities. Amazon has steadily deployed robots and AI-driven systems in its warehouses, allowing it to process more orders with fewer workers per unit. Walmart and Target have invested billions of dollars in automated fulfillment centers designed to lower labor costs and speed up delivery times.
For workers and local economies, the shift carries real consequences. Distribution centers are major employers in many regions, particularly in the U.S. South, where states such as Tennessee and Mississippi have attracted logistics hubs with tax incentives and promises of stable jobs. As automation accelerates, those employment bases are becoming less secure, even as companies maintain or expand physical infrastructure.
But the challenge goes beyond cost-cutting for Nike. Automation can deliver efficiency and speed, but it also requires significant upfront investment and careful execution. A misstep could leave the company with expensive systems that fail to deliver expected savings or flexibility if demand patterns change again.
For now, management appears committed to pushing ahead. The 775 job cuts signal that Nike’s turnaround will involve difficult trade-offs, particularly for workers caught in the shift. They also underscore how deeply automation is reshaping corporate America’s supply chains, as even one of the world’s most powerful consumer brands retools its operations for a future that demands leaner costs, faster response times, and fewer hands on the warehouse floor.