Nike Announces Further Workforce Reductions Amid Restructuring Push

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Sportswear giant Nike is intensifying its corporate overhaul, with plans to eliminate 775 positions across its U.S. distribution network. This marks the company's third significant round of job cuts within a three-year period, as it leans heavily into automation to improve profitability. The strategic shift comes as the company's shares continue to face downward pressure in the market.

Adding to a period of significant transition, Nike appointed new leaders to two crucial regional roles on January 20, 2026. César Garcia was named to lead the EMEA region, while Cathy Sparks took the helm for Greater China.

Simultaneously, the organization is investigating a potential data security incident. A ransomware group has claimed responsibility for publishing internal company information. This cybersecurity breach introduces further complexity to Nike's ongoing turnaround efforts.

Distribution Centers Face the Brunt of Cuts

The specific job reductions, confirmed by Nike on January 26, 2026, will primarily affect distribution facilities in Tennessee and Mississippi. This move follows a pattern of workforce streamlining, including the elimination of approximately 1,000 corporate roles in August 2025 and over 1,600 positions in February 2024.

In a statement, the company framed the decision as part of a plan to "reduce complexity, increase flexibility, and build a more responsive, resilient, and efficient operation." A core component of this strategy is the "accelerated adoption of advanced technology and automation."

Key Restructuring Details:
* Workforce reduction of 775 in distribution centers (January 2026)
* Global employee count: 77,800 (as of May 2025)
* Third major layoff initiative in three years
* Strategic emphasis on automation and technology

Excess Capacity Follows Sluggish Sales

Analysts point to overexpansion during Nike's previous direct-to-consumer focused strategy, which some argue came at the expense of wholesale partnerships. David Swarz, an analyst at Morningstar, noted, "Nike's sales growth has been significantly below trend for the past two years. It is highly likely the company built out too much warehouse capacity and hired too many people." Current order volumes no longer justify the previous staffing levels at these distribution hubs.

Share Performance Reflects Operational Challenges

Nike's equity traded lower in the week following the restructuring announcement. Over the preceding six months, the stock declined by roughly 17 percent. Its 52-week trading range sits between $52.28 and $82.44, with a total market capitalization of approximately $93 billion.

The financial strain is evident in the company's recent earnings report. For the second fiscal quarter of 2026, net income plummeted by 32 percent. The results were weighed down by tariff impacts, costs associated with the corporate turnaround, and persistent softness in the critical China market.

Investor Attention Turns to Upcoming Results

The cost-cutting measures align with a broader industry trend toward logistics automation. All eyes are now on the next quarterly financial report, scheduled for release on March 18, 2026. Investors are seeking clarity on whether these efficiency drives will successfully bolster profit margins. The larger challenge for Nike remains recapturing market share lost to competitors while implementing this stringent restructuring plan.