Nike to Cut 775 Distribution Center Jobs, Increasing Automation

Core Viewpoint - Nike plans to cut 775 employees primarily from its distribution centers in Tennessee and Mississippi to enhance operational efficiency and improve growth and margins [1][2] Group 1: Operational Changes - The layoffs are part of Nike's strategy to accelerate the use of automation in its distribution operations [1][2] - The company aims to strengthen and streamline operations to better serve athletes and consumers, focusing on advanced technology and automation [3] - Nike's distribution centers and staff expanded under former CEO John Donahoe's direct-to-consumer strategy, but current CEO Elliott Hill is shifting back to wholesale partnerships [3] Group 2: Recent Layoffs and Financial Performance - Last summer, Nike cut 1,000 corporate jobs, which was less than 1% of its corporate staff, following a previous layoff of over 1,500 jobs in February 2024 [4][5] - Nike's Direct sales were down 12% and consolidated digital sales down 15%, while wholesale sales experienced a more muted decline [4] - The company is repositioning its digital strategy by reducing promotional days and markdown rates, shifting closeout liquidation to factory stores [4]