Under Armour (UA -0.16%) (UAA -0.76%) is trying to slash costs as the financial toll of the COVID-19 pandemic rises.
The sports apparel giant said on Friday that layoffs will begin on April 12 across most of its U.S. retailing store base, which is closed until further notice. While management is aiming to serve customers' shopping needs as soon as the virus threat passes, executives said aggressive cost cuts must follow the recent sales slump.
"This unanticipated shock to our business has been acute," CEO Patrik Frisk said in a press release, "forcing us to make difficult decisions to ensure that Under Armour is positioned to participate in the eventual recovery of demand."
Image source: Getty Images.
The company will have paid four weeks of leave for most affected workers by the time layoffs begin, and it expects to continue providing health benefits for eligible employees through mid-June.
Under Armour separately detailed a restructuring plan that aims to reduce costs and improve cash flow that will include one-time charges of between $475 million and $525 million this year. Executives withdrew their 2020 outlook as it is unclear when most of its stores across Europe and North America will be able to safely reopen for business.
