Under Armour is the latest company in the retail space to resort to mass layoffs as the COVID-19 pandemic continues to take its toll on the U.S. economy.
The Baltimore-based athletic apparel and footwear maker said in a U.S. Securities and Exchange Commission filing Tuesday that it plans to cut about 600 jobs primarily in its “global corporate workforce.”
The company also raised its restructuring costs for the year by $75 million and now expects to incur about $550 million to $600 million in charges.
Tuesday’s filing serves as an update to the brand’s previously announced plans on April 3 when it said it would temporarily lay off associates at its full-price and Factory House outlet stores, as well as roughly 600 people at its U.S.-based distribution centers, starting April 12. (It is unclear whether the same employees impacted by furloughs in April are the ones currently facing layoffs.)
At the time, Under Armour had expected to incur $475 million to $525 million in pre-tax charges as it terminates leases and cuts back on employee severance and benefits costs.
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It continues to anticipate about $300 million of restructuring charges related to its New York flagship store as well as now expects $70 million of other facility and lease termination costs.
Under Armour said the majority of charges will occur by the end of the year.
The ongoing global health crisis has hit the retail sector particularly hard: Some nationwide chains including JCPenney, J.Crew and Neiman Marcus have sought Chapter 11 protection while fast-fashion giant H&M and more recently Frye have collectively announced hundreds of closures in hopes of staying afloat. Under Armour in April had joined many of its retail peers — DSW, Gap, Macy’s and Nordstrom among them — in furloughing workers as the pandemic forced store closures throughout April and into May. At the time, some experts had posited that coronavirus-induced furloughs would become permanent layoffs in many sectors.
FN has reached out to Under Armour for additional comment.