By Neil J Kanatt and Nicholas P. Brown

Jan 26 (Reuters) – Nike will lay off 775 employees, a source familiar with the matter told Reuters on Monday, as the sportswear giant looks to boost profits and accelerate its use of automation.

The cuts will primarily affect distribution center functions in Tennessee and Mississippi, where the sneaker giant operates department stores, the person said.

Nike, whose business is struggling, is trying to re-establish itself as the world’s leading sportswear brand after losing market share to rivals. It has suffered several rounds of layoffs in recent years.

In August, it cut just under 1% of its corporate workforce as part of its turnaround efforts under CEO Elliott Hill, who takes the top job in 2024.

It had previously announced it would cut 2% of its jobs, more than 1,600 in total, by February 2024.

Monday’s layoffs were first reported by CNBC.

In a statement to Reuters, Nike said it is “taking steps to strengthen and streamline our operations so we can move faster and (and) operate with more discipline.”

The move will primarily affect its distribution operations in the United States, the company said.

“Nike’s sales trends over the past two years have been well below normal, so it’s very likely that it’s overstocked and overstaffed,” Morningstar analyst David Swarz said. Coupled with AI’s rapidly growing capabilities, the cuts “were not surprising,” he said.

Nike had 77,800 employees worldwide, including retail and part-time staff, in May 2025 when it published its latest annual report.

Under Hill, the company has been investing heavily in its sneaker lines as it tries to refocus the brand on core sports like running and soccer.

Nike posted a second straight quarter of falling gross margins in December as poor sales in China and efforts to retool its product mix continued to plague it.

It also recently suffered a data breach that saw hackers release a trove of corporate data.

Nike said in its statement Monday that the layoffs “are designed to reduce complexity, improve flexibility and … support our path back to long-term profitable growth.”

(Reporting by Neil J Kanatt in Bengaruru and nicholas ‌brown in New York; Editing by Phoja Desai)