Layoffs at Fanatics, Locus Robotics Reflect New Warehouse Realities
More jobs in the apparel supply chain are being thinned out, with Fanatics and Locus Robotics both laying off staff.
According to a Worker Adjustment and Retraining Notification (WARN) notice, 218 Fanatics employees will be laid off ahead of the closure of a Jacksonville-Fla.-area fulfillment center later this year.
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Layoffs will begin April 1, but the terminations are expected to continue through the date of the facility’s closing on August 1.
Fanatics’ decision aligns with wider staff reductions across warehouses. According to data from the U.S. Bureau of Labor Statistics (BLS), the transportation and warehousing industry saw 23,000 job losses in December. Since its peak employment numbers in October 2022, the sector is down 100,000 jobs as demand for warehousing reverted from pandemic highs.
Fanatics said in the WARN notice that it will maintain a strong presence in its Jacksonville headquarters, where the sports apparel retailer hosts more than 1,500 employees at its corporate offices. In addition, Fanatics will continue to operate the in-venue retail business for the NFL’s Jacksonville Jaguars.
A Fanatics spokesperson told Sourcing Journal the e-commerce retailer wanted to ensure that all its facilities are well-equipped to efficiently and effectively ship products worldwide.
“In looking at our current real estate portfolio, our Commonwealth facility in Jacksonville is one of the oldest buildings we operate within,” the spokesperson said. “This has resulted in continued challenges as we try to keep it up to date to service the needs of our fans as well as meet new demands. To better service our fans within the Southeastern United States, we will be shifting our fulfillment efforts to newer buildings in and around the region where we have access to updated technology and infrastructure to ensure a better fan experience.”
Fanatics says that most of its orders were shipped from the Jacksonville warehouse, as well as distribution centers in Las Vegas; Aberdeen, Md.; Louisville, Ky. and Frazeysburg, Ohio.
Affected employees are not covered by any collective bargaining agreement, so they are not unionized. The notice said that bumping rights, which enable a senior employee to displace a lower-level employee in their job in the event that their position is eliminated, are not in effect.
The company, which sells licensed apparel for teams across all four professional sports leagues in the U.S., as well as collegiate sports, was valued at as much as $31 billion to close 2022 after raising roughly $700 million in funding.
Locus Robotics confirms ‘small, targeted’ staff reduction
As for Locus Robotics, the manufacturer of autonomous mobile robots (AMRs) for warehouse automation made a “small, targeted reduction in force,” a company spokesperson told Sourcing Journal.
The spokesperson did not comment on the number of employees that were laid off, but indicated the robotics company made adjustments in its sales and marketing organization to “align to market realities.”
“This reduction in force reflects a proactive effort to consolidate and focus our resources toward Locus’s core priorities. This action will help reduce costs and align resources with strategic priorities, positioning Locus for ongoing, long-term growth,” the spokesperson said. “All of the long-term trends are favorable for AMR vendors—the labor shortage is real and persistent and there continues to be steady growth in e-commerce with consumers expect faster deliveries.”
Once valued at nearly $2 billion after a $117 million Series F funding round in November 2022, the DHL partner unveiled in late December that its technologies picked a record 331 million units for its retail and third-party logistics (3PL) providers during the 2023 holiday season, a 66 percentage increase over last year.
These “LocusBots” averaged nearly 7 million units picked per day, and are built to engage in different warehousing tasks at once, including picking and putaway, case picking and putaway, replenishment, pallet building, routine routes, point-to-point transport and counting.
But despite the holiday success, overall adoption of warehouse automation slowed as the Covid-19 pandemic subsided, namely due to the slowdown of e-commerce acceleration.
According to automation market research firm Interact Analysis, the order intake for fixed automation was projected to decrease by approximately 8 percent in 2023 as of November, with revenue declining in the low single digits as well. Although the company says automation revenue should largely remain flat in 2024, it expects a return to double-digit order intake growth in 2025.
Locus Robotics is laying off employees as another robotics company, Dextrous Robotics, shuttered operations. The Memphis-based firm’s CEO Evan Drumwright said the company “adopted an aggressive trajectory 18 months ago that the recent investment market didn’t support,” resulting in the insolvency.
Additionally, Locus is currently expanding its physical footprint amid the reduced headcount, breaking ground last summer on a new 200,000-square-foot global headquarters in Wilmington, Mass.
The facility will serve as the hub for Locus Robotics’ global operations and will house its engineering, manufacturing and operations divisions. The building is expected to open in spring 2024.
