Nike is laying off 775 employees in a bid to boost profits and accelerate its use of automation, CNBC reported on Monday, citing people familiar with the matter.

The cuts will primarily impact distribution center roles in Tennessee and Mississippi, where the sneaker giant operates large warehouses, the report said.

Nike said in August last year it planned to cut less than 1% of its corporate workforce as part of the sportswear maker’s efforts to turn around its business under CEO Elliott Hill. It had previously announced it would cut 2% of its jobs – more than 1,600 in total – in February 2024.

Nike did not immediately respond to a Reuters request for comment.

Under Hill, the company has been investing in its running shoe and sneaker lines to reclaim lost ground in these segments. Nike had reported a drop in gross margins for the second consecutive quarter in December, as poor sales in China and efforts to reset its product mix continued to vex the struggling sportswear giant.

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(Reporting by Neil J Kanatt in Bengaluru; Editing by Pooja Desai)