Stock Markets January 26, 2026

Nike to Eliminate 775 Distribution Roles in U.S. as Automation Ramps Up

Cuts concentrated in Tennessee and Mississippi distribution centers as company pursues efficiency amid margin pressure

By Leila Farooq
Nike to Eliminate 775 Distribution Roles in U.S. as Automation Ramps Up

Nike will cut 775 positions at its U.S. distribution centers, primarily in Tennessee and Mississippi, as the company increases automation to improve profitability. The move follows prior workforce reductions and comes amid declining gross margins and weak sales in China as Nike adjusts its product mix.

Key Points

  • Nike will cut 775 positions at U.S. distribution centers, primarily in Tennessee and Mississippi, to accelerate automation and improve profitability.
  • The reductions come after prior workforce actions: a sub-1% corporate cut announced in August and an earlier roughly 2% reduction - more than 1,600 jobs - disclosed in February 2024.
  • Nike has reported declining gross margins for a second straight quarter in December, with weak sales in China and a product mix reset cited as contributing factors; investments are being directed to running shoes and sneaker lines.

Nike plans to remove 775 positions from its U.S. distribution operations in a bid to lift profitability and speed the adoption of automation, sources familiar with the matter told news outlets. The workforce reductions are expected to fall mainly on roles at large distribution centers located in Tennessee and Mississippi.

The announcement follows a series of earlier workforce actions at the sportswear company. In August of last year, Nike said it would reduce less than 1% of its corporate headcount as part of efforts to reposition the business under CEO Elliott Hill. Prior to that, the company disclosed a separate reduction that represented approximately 2% of jobs - more than 1,600 positions - announced in February 2024.

Under Hill's leadership, Nike has been directing investment toward its running shoes and sneaker ranges with the aim of regaining market share in those categories. At the same time, the company has faced margin compression: Nike reported a decrease in gross margins for a second successive quarter in December as weak sales in China and a deliberate reset of its product mix weighed on results.

Nike did not immediately respond to a request for comment.


Context and operational focus

The staffing reductions announced for distribution centers are part of a broader push to integrate more automation into Nike's logistics and fulfillment operations. The company operates sizeable warehouse facilities in Tennessee and Mississippi, and the current cuts are concentrated among distribution-center roles rather than corporate functions.

The earlier workforce reductions referenced by the company - the sub-1% corporate cut in August and the roughly 2% reduction announced in February 2024 that totaled over 1,600 jobs - reflect an ongoing effort to tighten costs while reshaping product and marketing priorities under executive leadership.


Financial and market signals

Nike's sequential gross margin declines through December and persistent softness in China underscore the financial pressures prompting operational changes. The company has framed investments in core footwear categories, notably running shoes and fashionable sneaker lines, as central to its recovery strategy.

Observers of the retail, logistics and consumer apparel sectors will likely view the distribution center layoffs and accompanying automation push as indicative of broader cost-management and efficiency priorities at a major apparel manufacturer.

Risks

  • Continued margin pressure - Nike reported a drop in gross margins for a second consecutive quarter in December, signaling ongoing financial strain that could affect future profitability.
  • Market demand uncertainty in China - Weak sales in China are explicitly noted as a factor weighing on Nike's results, creating revenue and strategic risk in that market.
  • Operational disruption and labor impacts - Concentrated cuts in distribution-center roles in Tennessee and Mississippi introduce uncertainty for logistics operations and local labor markets as the company shifts toward greater automation.

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