It was inevitable. The adidas Group, (parent TaylorMade-adidas Golf, Adams Golf and the Ashworth apparel brand), has laid off approximately 15 percent of its global golf workforce. Most of those layoffs are believed to be in Adams Golf, which has closed its Plano, Texas, headquarters and moved its operations to TMaG headquarters in Carlsbad, Calif.
The adidas Group recently reported that TMaG sales fell 27 percent (approximately $315 million) the first six months of this year. The German conglomerate doesn’t provide earnings numbers for TMaG, but obviously those aren’t pretty. Earlier this year a TMaG source told me the company’s earnings dropped from $220 million in $170 million in 2013. I suspect the drop could be even severe this year.
In its official statement, TMaG said it is realigning its workforce “to better meet the needs of our business and ultimately, our consumers. This includes investing in new areas to strengthen our brands and strategically approach our future to reinforce our leadership in the industry.”
Not much help there, but as usual in these cases, there are a lot of questions:
- How much longer Adams Golf will continue to operate at all is only one question that currently has no answer. Stay tuned for an answer to that.
- Is this just the first round layoffs at TMaG? I’d say “Yes’’ to that. I’m sure Callaway Golf CEO Chip Brewer, the man who revived Adams Golf as company president before it was sold to TMaG some two years ago, has been fielding a lot of call from now former Adams Golf employees.
- Will TMaG counter Callaway Golf’s introduction of the Big Bertha V Series driver with a driver launch of its own? I say “No,’’ at least until the smoke clears with the layoffs, which likely won’t be before late in the fourth quarter.
- Will the blood-letting at TMaG, which many believe is the price the company has paid for faster product cycles the past several year, slow down the pace of new product introductions across the board? I think it’s too early to tell. In addition to Callaway, Ping Golf, Mizuno, Bridgestone and Titleist each have new products coming soon. It’s too late to pull the plug on them, meaning it will be at least until early next year before we get any kind of gauge on a change in product cycles.