Nike To Slash Over 700 US Distribution Jobs Amid Automation Push: Report

In a bid to enhance profitability and expedite the use of automation, Nike Inc. (NYSE:NKE) has reportedly decided to lay off 775 employees at its U.S. distribution centers.

More Layoffs At Nike Amid Industry Changes

The layoffs, announced by the sneaker giant, are in addition to the 1,000 corporate job cuts disclosed last summer, reported CNBC on Monday. Most of the job cuts will impact distribution center positions in Tennessee and Mississippi, where Nike runs its major warehouses.

Nike did not immediately respond to Benzinga‘s request for comment.

The decision to cut jobs at Nike’s distribution centers comes amid a broader trend of restructuring in the retail industry. Macy’s Inc. (NYSE:M) recently announced the closure of several facilities in Connecticut, leading to over 1,000 layoffs as part of its efforts to streamline its operations.

Restructuring Amid Uncertain Recovery

The move also comes as CEO Elliott Hill endeavors to revamp Nike after a period of sluggish sales and diminishing margins. He had previously warned that the "journey back to greatness" would not be linear, capturing the uncertain outlook for investors.

Notably, in May, Nike had announced plans to cut jobs in its technology division, outsourcing some work to third-party vendors. The move comes after the company forecasted a steeper-than-expected drop in Q4 revenue and reflects its cautious approach to regain consumer interest amid competition from trendier brands.

Despite the challenges, Nike’s stock has been resilient. Despite the company’s slower-than-anticipated turnaround, its shares have been trading marginally higher. However, analysts have highlighted potential strategic missteps, particularly in the North American wholesale channel, and challenges in China and the Converse brand. The timeline for recovery appears uncertain, indicating a potential downside to current projections.

Benzinga's Edge Rankings place Nike in the 19th percentile for quality and the 55th percentile for value, reflecting its average performance. Benzinga’s screener allows you to compare Nike’s performance with its peers.  

Price Action: Over the past year, Nike stock declined 14.01%, as per data from Benzinga Pro. On Monday, the stock edged (0.077% lower to close at $64.99.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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