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Sporting goods giant Under Armour announced today that it would eliminate around 600 jobs as a result of business challenges stemming from the pandemic. At the end of 2019, Under Armour said it employed 16,400 people.
CEO Patrik Frisk announced the news in an email sent to some employees this afternoon that was obtained by Business Insider. The memo is reprinted in its entirety below.
An Under Armour representative declined to comment beyond an 8-K filing.
The company furloughed thousands when the pandemic hit and sales dropped
The news comes after Under Armour saw overall revenue drop more than 40% in the second quarter due to the pandemic. In April, the company said it would furlough 6,600 employees at retail locations and distribution centers.
An Under Armour employee with direct knowledge of the situation said today’s layoffs included executives up to the vice president level and followed months of delays. This person said staff expected a round of layoffs in May but that Frisk had previously announced they would be delayed until August.
This was only the latest in a series of such moves, the person, said, with layoffs often classified under names like “Operation Excellence,” which referred to an earlier round that affected the company’s Baltimore headquarters in 2019.
In his memo, Frisk wrote that the company would “shift to a DTC-first business.”
The 8-K document states that the company agreed on the terms of the restructuring and listed $550 million to $600 mill lion in anticipated expenses, including $30 million in severance and benefit costs “related to a reduction of approximately 600 employees primarily in its global corporate workforce.”
According to the document, the restructuring project should be complete by the end of 2020.
Read the full memo below:
In February, we communicated that we would be undertaking a company-wide restructuring plan and that it would involve personnel reductions for corporate teammates. I am writing today to provide more details on this very difficult decision to eliminate certain corporate teammate positions. We do not take these decisions lightly and we have tried very hard to keep this number as small as possible.
This plan is part of an ongoing transformation that began three years ago. Over the past year, we have changed the structure of our operations and composition of our leadership team. We are taking these steps to make us stronger, as we continue to deliver innovative products, solutions and experiences that make Focused Performers better.
On top of the challenges we were already facing, we have watched over the past several months as COVID-19 has had an unprecedented impact on the world and our business. The pandemic has put pressure on us, like many companies, to be more agile, leaner, tighter, and focus on working smarter as we continue to create high value results.
Navigating these challenges, we have been doing everything possible to prioritize teammates while protecting the business. This includes cutting non-employee costs wherever possible and deferring capital expenditures, but unfortunately these cost reductions are not enough.
As part of our restructuring efforts, …read more
Source:: Business Insider