BALTIMORE — In response to the spread of COVID-19, Under Armour Inc. (NYSE: UA) will temporarily lay off some 6,000 employees at its outlet stores around the country and approximately 600 workers at its U.S. distribution centers, effective Sunday, April 12.
The Baltimore-based sports apparel retailer also said it would extend current store closures until further notice. In addition, the company’s board of directors and executive vice presidents will be taking 25 percent pay cuts during the public health crisis.
Under Armour workers at distribution centers that continue to work will be paid premium bonuses. The company will cover full health benefits for employees for approximately two months during the layoff period.
“In these unprecedented and challenging times, the majority of stores where Under Armour is available remain closed, contributing to a significant decline in revenue,” says Patrik Frisk, the company’s president and CEO. “While we’re thankful for the meaningful balance sheet improvements we’ve driven over the past two years and are seeing some early signs of recovery in our Asian-Pacific region, this unanticipated shock to our business has been acute, forcing us to make difficult decisions to ensure that Under Armour is positioned to participate in the eventual recovery of demand.”
Prior to the outbreak of COVID-19, Under Armour developed a restructuring plan to lower operating costs by about $500 million in 2020. That plan included $175 million in facility and lease termination costs; employee severance and benefits costs; and other termination and restructuring expenses.
Under Armour’s stock price opened at $7.92 per share on Monday, April 6, down from $19.50 per share a year ago.
— Taylor Williams