Nike layoffs hit 775 workers in automation move at distribution facilities

Nike is planning to cut nearly 800 jobs amid an automation push at the footwear and apparel giant’s distribution centers.

The company is cutting 775 jobs that will primarily impact jobs at the retailer’s distribution centers in Tennessee and Mississippi as the company looks to automate more of its supply chain. The news was first reported by CNBC, citing people familiar with the matter.

“To power our Win Now actions, we’re taking steps to strengthen and streamline our operations so we can move faster, operate with greater discipline, and better serve athletes and consumers,” a Nike spokesperson told FOX Business.

“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. Our actions to consolidate our operations primarily impact our U.S. distribution operations,” the company said.

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“These actions are designed to reduce complexity, improve flexibility, and build a more responsive, resilient, responsible, and efficient operation and to support our path back to long-term, profitable growth, including contributing to improved EBIT margins over time,” Nike said.

The distribution center layoffs in the South come after similar moves by Nike in the last two years aimed at reorganizing its operations to boost the company’s efficiency and financial outcomes.

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Nike said in August last year that it planned to cut less than 1% of its corporate workforce amid an effort to turn around its business under the leadership of CEO Elliott Hill.

The company previously announced that it would cut 2% of its workforce, amounting to more than 1,600 workers, in February 2024.

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Under Hill’s leadership, Nike has been investing in its running shoe and sneaker lines to reclaim ground lost to competitors in those 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 present challenges for the struggling sportswear giant.

The company’s stock closed Monday’s trading session at $64.99 a share and is up 2% year to date.

Reuters contributed to this report.