Nike Sheds 106,000 Workers, Since Last Year, As Profit, Revenue Rise

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An athlete wears a pair of Nike shoes at the U.S. Olympic athletics trials in Eugene, Oregon, June 29, 2012

Nike, the largest sportswear country in the world with hundreds of manufacturing suppliers outside the United States, has cut about 106,000 contract factory workers over the last year as the Beaverton, Oregon, company shifts toward automation.

According to the company’s latest sustainability report released this month, the company had in its fiscal year 2013 just over 1 million contract workers that make the company’s shoes and sportswear, 90 percent of them located in Asia. That’s down 9.5 percent from fiscal year 2012, as the company seeks to automate more of the manufacturing process from more advanced suppliers.

nike Nike's latest sustainability report shows a decline in global contract factory workforce of 105,864 employees. The number of factories supplying Nike has also declined by almost 14 percent to 785.

"Nike's goal is to work with fewer, better contract factory partners across our supply chain," Nike spokesman Reggie Borges told the Portland Business Journal in Oregon in an email.

The biggest cuts have come from Asia where most of the company’s products are made. The decline doesn’t correspond with a fall in sales. Profit increased nearly 16 percent to $2.47 billion on 5 percent increase in revenue, to $25.31 billion.

nike bar chart Nike's cut in contract factory workers has come even as it has grown revenue and profit. The company is getting by on fewer contract workers.

Fifty-six percent of Nike Inc. (NYSE:NKE) shoes are manufactured in Vietnam and Indonesia and most of the rest are made in China, according to the company’s 2013 annual report. Nike’s athletic apparel is made primarily in Brazil, Mexico, Argentina and India. Nike independent contract factories are spread across 28 countries.

At the close of the company’s fiscal year 2009, amid the global economic downturn, Nike reported about 823,000 contract factory workers, a 7 percent increase from the previous fiscal year (PDF). Nike has about 48,000 employees worldwide, according to its fical year 2013 report.  

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