The Gap is cutting costs in an effort to become more nimble. As a result, it is cutting 1,800 corporate employees roughly three times the number of jobs it eliminated at its headquarters last fall.
Similar layoffs at large U.S. corporations this year, including Amazon and McDonald’s, have led to additional layoffs at the struggling chain. As the economy slows, white-collar workers will bear the brunt of the headcount reductions.
Sales of GAP comes down
The San Francisco-based chain, which also owns Banana Republic, Old Navy, and Athleta, stated in a regulatory filing on Thursday that employees in its San Francisco and New York offices, in addition to upper field positions like regional store managers, will be affected. Last September, Hole sliced 500 corporate positions.
The layoffs, according to interim CEO and executive chairman Bob Martin, will result in annualized savings of $300 million. The regulatory filing states that the layoffs should be finished by the end of July.
In a prepared statement, Martin stated, “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 is in charge because the Gap company is still trying to find a replacement for Sonia Syngal, the CEO, who left the company in July.
Despite numerous initiatives to fix the company through a rotating list of executives, Gap has been experiencing a sales slump for years. In addition to other disruptions, The Gap’s financial situation has been exacerbated by the pandemic and rising costs in the supply chain. Net sales at The Gap Inc. decreased by 6% in the most recent quarter, with declines across all brand divisions.
According to its annual report, Gap had approximately 95,000 employees as of January 28, with roughly 9% working in its headquarters. On Thursday, Gap’s stock rose nearly 1 percent, or 8 cents, to $9.42.