Nike is laying off 775 employees in a bid to improve its financial results and accelerate the implementation of “automation,” CNBC has learned.
The layoffs, which come on top of 1,000 corporate layoffs announced last summer, mainly affect distribution centers in Tennessee and Mississippi, where the footwear giant operates large warehouses, people familiar with the matter said.
In a statement to CNBC, Nike said the layoffs primarily affect its U.S. distribution operations and are intended to “reduce complexity, improve flexibility and build a more responsive, resilient, accountable and efficient business.”
The company added that the reductions are part of Nike's goal to return to “long-term, profitable growth” and improve margins.
As artificial intelligence and automation become more widespread in American corporations, employment in distribution centers is expected to decline. Last year, UPS announced plans to cut 48,000 jobs. jobs — partly due to increasing automation in its facilities.
The layoffs come as CEO Elliott Hill tries to rebuild Nike's position after years of declining sales and shrinking margins.
Under Hill's leadership, Nike is trying to acquire wholesale partners, get rid of expired inventory and revitalize innovation. In December, when releasing its second-quarter earnings report, Nike reported that its net income had fallen 32%. due to tariffs, restructuring costs and slowdown in the key Chinese market.
Source: CNBC
