In the wake of a second consecutive quarterly loss, albeit one that was smaller than originally forecast, struggling athletic apparel company Under Armour announced Tuesday that it is laying off 2 percent of its 15,000 employees worldwide, or about 280 people, as part of a restructuring plan.
According to CNBC, Under Armour’s stock fell more than 8 percent in the immediate wake of Tuesday’s announcement, though it did rebound slightly. Shares of Under Armour have plummeted about 49 percent over the past 12 months, with a big plunge coming after Under Armour chief executive Kevin Plank issued comments praising President Donald Trump as “a pro-business president” and “a real asset for this country.”
A number of the company’s paid endorsers, including Stephen Curry, Misty Copeland and Dwayne “the Rock” Johnson, condemned Plank’s comments, leading the company to explain itself in a full-page Baltimore Sun ad.
As laid out by Yahoo Finance, the company’s struggles also were the result of an overreliance on basketball footwear, struggles at its brick-and-mortar stores and its failure to embrace fashion trends, as surging Adidas has.
In an earnings call, Plank said the athletic apparel and footwear company will now focus on five areas — men’s training, women’s training, running, baseball and lifestyle — as part of its reorganization, which will cost the company $110 million to $130 million in lease terminations, employee severance and contract terminations this fiscal year. The company also says it will pivot from selling predominantly men’s apparel “to distinct collections for men, women and kids.”
It’s the second round of layoffs for the Baltimore-based company this year. In April, it laid off around 24 employees — most of them based in Copenhagen — in its Connected Fitness unit. Half of the people laid off after Tuesday’s announcement will come from its Baltimore headquarters, CNBC reports.