NEW YORK — The Gap is laying off 1,800 corporate workers, roughly three time the number of headquarters jobs it cut last fall, as the struggling chain cuts costs in a bid to become more nimble.
More layoffs at the struggling chain follow similar cuts at large U.S. corporations this year, such as Amazon and McDonald’s, with white collar workers taking the brunt of the head count reductions as economy slows.
In a regulatory filing Thursday, the San Francisco-based chain, which also owns Banana Republic, Old Navy and Athleta, said employees in its San Francisco and New York offices, as well as upper field positions such as regional store managers, will be impacted. Last September, Gap slashed 500 corporate jobs.
Executive chairman Bob Martin, who is also interim CEO, said the layoffs will lead to $300 million in annualized savings. The layoffs should be completed by the end of July, according to the regulatory filing.
“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, ” said Martin in a prepared statement.
Martin is presiding over the helm as the company is still looking to fill the vacancy left when Gap CEO Sonia Syngal stepped down last July.
Gap has been struggling with a sales slump for years despite numerous initiatives to fix the business through a revolving list of executives. The pandemic and surging supply chain costs have exacerbated financial conditions at The Gap, in addition to other disruptions.
Last fall, Gap and Kanye West abruptly ended a partnership to distribute the rap artist’s Yeezy clothing line. The partnership was announced two years ago with much fanfare.
In its most recent quarter, The Gap Inc. recorded a 6% drop in net sales with declines across all brand divisions. Quarterly losses stacked up to $263 million from just $16 million the previous year during the same period.
As of January 28, Gap employed roughly 95,000 employees, about 9% worked in headquarters locations, according to its annual report.
Gap’s shares rose nearly 1% or 8 cents, to $9.42 Thursday.
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Source: abc news
