Nike to Lay Off 775 Employees as it Accelerates ‘Automation’ at US Distribution Centers

Nike is cutting 775 employees as the company looks to boost its bottom line and accelerate its use of “automation,” CNBC has learned. The layoffs, which are in addition to the 1,000 corporate job cuts the company announced last summer, primarily impact distribution center roles in Tennessee and Mississippi, where the sneaker giant operates large warehouses, people familiar with the matter said. The company added the cuts are part of Nike’s goal to get back to “long-term, profitable growth” and improve margins.

“We are sharpening our supply chain footprint, accelerating the use of advanced technology and automation, and investing in the skills our teams need for the future,” Nike said in a statement to CNBC.

Total Retail's Take: As part of its turnaround strategy, Nike CEO Elliott Hill is returning to a greater focus on wholesale partnerships for distribution of the brand's products, eschewing the previous regime's emphasis on direct-to-consumer selling via company-owned retail stores and websites. A byproduct of this is less distribution center staff is needed to fulfill and ship orders, and therefore a reduction in workforce was announced.

Furthermore, this headline isn't going to calm many workers' fear that technology, and more specifically AI, are coming to take their jobs. Nike is the latest organization to suggest a greater investment in AI and automation will enable it to operate more flexibly, efficiently and cost effectively (i.e., replace human jobs with technology). Last year, for example, UPS announced plans to cut 48,000 roles in part because of more automation at its facilities.