Monday, June 24, 2024

Under Armour is laying off workers as job cuts across US grow

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Sportswear company Under Armour announced plans to layoff workers due to declining sales becoming the latest compnay to shed jobs in 2024.

Kevin Plank, the company’s president and CEO, announced the decision Thursday when detailing the brand’s fourth-quarter earnings and taking future sales.

“Due to a confluence of factors, including lower wholesale channel demand and inconsistent execution across our business, we are seizing this critical moment to make proactive decision to build a premium positioning for our brand, which will pressure our top and bottom line in the near term,” the CEO said.

“Over the next 18 months, there is a significant opportunity to reconstitute Under Armour’s brand strength through achieving more, by doing less and focusing on our core fundamentals: Driving demand through better products and storytelling, running smarter plays like simplifying our operating model and elevating our consumer experience.

“In parallel, we’re focused on cost management and implementing the strategies necessary to grow our brand and improve shareholder value as we move forward.”

The release did not specify how many positions would be affected.

Sportswear company Under Armour announced plans to layoff workers. (Getty Images)

Under Armour’s revenue dipped 5 percent worldwide, the company noted in the report. In North America, sales decreased 10 percent, while international revenue increased 10 percent.

The brand is predicting even harsher results in fiscal 2025 with an expected revenue decline of 15 to 17 percent.

Under Armour estimates that it will spend about $70 to $90m on restructuring costs and will pay out $7 to $15m to cover employee severance and benefits costs.

The company also announced plans to cut down on promotions and discouting to help reduce costs. Under Armour officials are also planning to cut the company’s style count by a quarter.

The announcement caused a slight dip in the company’s stock, which sat at $6.76 a share midday.

The brand is predicting even harsher results in fiscal 2025 with an expected revenue decline of 15 to 17 percent. (Getty Images)

It’s the latest move in a series of job cuts being made by major retailers.

Earlier this week, Walmart announced it would be cutting hundreds of corporate jobs as it asks workers to return to the office, and Tesla reported that it would eliminate 10 percent of its global workforce.

Tech industries have been hit hard in recent months with Amazon, Microsoft and Google all announcing massive layoff plans.

The decisions could be due to an economic shift. The US economy is growing at a slower rate than it did in the last quarter, according to the Bureau of Economic Analysis of GDP numbers. The agency reported a growth of 1.6 percent during the first three months of 2024, while it grew at a rate of 3.4 percent in 2023.

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