REACTION TO BAD NEWS: REDUCE EMPLOYEES

Am I Next? Under Armour Layoffs and Restructuring

It appeared that specialty clothing manufacturer was taking market share from Nike and Adidas. Until CEO Kevin Plank gained some measure of negative notoriety by joining President Donald Trump’s White House Manufacturing Council. Followed by the mocking of Golden State Warrior Stephen Curry’s shoe line on social media. The negative publicity continued as Trump botched his condemnation of neo-Nazis and excoriated athletes who took a knee during opening ceremonies to events. In spite of the politics and public relations, some believe that the decline was inevitable as the status signaling value of expensive sneakers declined and Under Armour failed to attract more women buyers.

Of course, CEO Plank attributed the decline in earnings to lower demand for Under Armour products in the United States, in spite of growing (but rather small) markets overseas.

CEO Kevin Plank said in the earnings release that the biggest problem is lower demand for its shoes and athletic apparel in its home market of the United States.

So it should come as no surprise that the company’s reaction to two consecutive quarterly losses would be a restructuring plan and the layoff of personnel – in this case roughly 280 employees. This completes the traditional cycle of balancing out losses with employee reductions.