Under Armour Layoffs Set Company up for Major Restructuring, Says CEO

Under Armour is planning to restructure its business plan amid a decline in revenue. This restructuring includes an undisclosed number of employee layoffs.

Founder and CEO Kevin Plank discussed this company pivot in a Thursday conference call with investors and analysts, per Bloomberg Law. He said of the reduction, “This is not where I envisioned Under Armour playing at this point in our journey. That said, we’ll use this turbulence to reconstitute our brand.”

Additionally, in a press release, Plank explained, “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 decisions to build a premium positioning for our brand, which will pressure our top and bottom line in the near term.”

Under Armour’s board of directors has subsequently approved a plan to strengthen and support the company’s financial and operational sectors moving forward. The plan expects to “incur total estimated pre-tax restructuring and related charges of approximately $70 to $90 million.” These costs include employee severance and benefits costs and millions allocated to “transformational initiatives.”

Plank plans to take steps to increase revenue and profit and grow Under Armour’s brand strength over the next 18 months. In the press release, he stated, “Amid a challenging retail environment in fiscal 2024 that included high inventories and a consistent drumbeat of promotions — we demonstrated disciplined expense control and delivered results that were aligned with our previous outlook. We also maintained a strong balance sheet, closing the year with a solid cash position and healthy inventory levels.”

In March 2024, it was announced that Plank would return to Under Armour to become president and chief executive officer, effective April 1, 2024. Plank succeeded Stephanie Linnartz.

Upon his appointment, Plank discussed how Under Armour continued to navigate several “post-pandemic consumer, industry, and brand-specific factors.” However, he added that the company was working hard to “reconstitute” its strengths and make “thoughtful, balanced business decisions” moving forward.

Under Armour expects to reduce promotions and discounts in its direct-to-consumer business in 2025 to support its continued growth.