Under Armour today announced temporary lay-offs for all the workers at its retail and outlet stores and about 600 employees in distribution centers to mitigate the economic slowdown brought on by COVID-19.
The cuts take effect April 12. Employees who get to keep their jobs at the apparel company’s distribution centers will receive a bonus as they process orders during the crisis.
The athletic apparel company, headquartered in Tide Point, closed all of its stores on March 15 in response to the pandemic, meaning impacted employees will have received up to four weeks of full pay, Under Armour said today. Stores will remain closed until further notice.
Workers who are temporarily laid off will have full health benefits for an additional two months, the business said.
In another cost-cutting measure, Under Armour announced that its board of directors and every senior member at the level of executive vice president and above will take a pay cut of 25 percent through the duration of the crisis.
Under Armour President and CEO Patrik Frisk said in a statement that the shock from the pandemic has offset some of the improvements the business has made in recent years after several rounds of restructuring to increase profits.
Frisk said the pandemic is “forcing us to make difficult decisions to ensure that Under Armour is positioned to participate in the eventual recovery of demand.”
“We do not take these decisions lightly and are doing all we can to minimize the impact on our teammates during this time,” he said. “Because of the strength of our brand and the steps we have taken, we will weather this storm.”
After posting a fourth-quarter loss of $15.3 million, Under Armour announced in February that it was considering yet another restructure plan. The board approved said plan on March 31, expecting to save between $475 million and $525 million.
Roughly half of that amount would come from scrapping plans for a flagship store in New York City.
Due to the uncertainty of the pandemic, Under Armour said it was withdrawing the forecast for the first quarter and all of 2020 that the company released in February. There are no plans to update those figures at this time.
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