- Gap plans to lay off 1,800 employees across its workforce in an effort to streamline operations and cut costs.
- The cuts will affect headquarter positions and those in “upper field” roles, or workers who hold leadership titles outside of a headquarter office.
- The layoffs will “release untapped potential” across Gap’s brands – its namesake line, Old Navy, Banana Republic and Athleta, interim CEO Bob Martin said.
Gap will lay off about 1,800 employees as part of a broad effort to cut costs and streamline operations, the company said Thursday.
The cuts, first revealed on Tuesday, are more than three times larger than the 500 layoffs it announced in September. The layoffs will affect roles at Gap’s headquarter locations along with upper field positions, or workers such as regional store leaders who hold leadership titles outside of a headquarter office, the company said.
The job cuts come as the apparel retailer struggles to return to profitability while sales sag. The layoffs are expected to result in annualized savings of $300 million, Gap’s interim CEO Bob Martin said in a statement.
“We are taking the necessary actions to reshape Gap Inc. for the future – simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience,” Martin said.
“These changes include the consistent brand leadership structures we announced last month aimed at flattening the organizational structure to improve the quality and speed of decision-making, while in turn reducing overhead expense,” he added.
The layoffs will “release untapped potential” across Gap’s brands – its namesake line, Old Navy, Banana Republic and Athleta, Martin said.
“This means saying goodbye to friends and team members we care about, and I represent the collective voice of the company in expressing a sincere appreciation to every employee for the dedication, energy, and heart they have given to Gap Inc.,” Martin said.
During an earnings call in March, Martin said the company planned to decrease management layers. But he did not say at the time how many positions would be cut.
He noted during the call the apparel retailer’s staff has been “dampened by a complicated organizational structure, bureaucracy, and outdated processes” that have held the company back.
As of late January, Gap employed about 95,000 staff members, 81% of which work in retail locations, according to securities filings. About 9% of its global staff work in headquarter locations.
The retailer has been grappling with a string of losses, inventory woes and the absence of a permanent CEO.
In the three months that ended Jan. 28, Gap posted $4.24 billion in sales — a 6% decrease from the prior-year period — and a net loss of $273 million, or 75 cents a share. It reported annual net losses in both 2020 and 2022.
Gap’s stock has fallen about 17% this year. Shares are hovering around $9, giving the company a market cap of about $3.4 billion.
Source: Business - cnbc.com
