Companies

Gap to cut about 1 800 jobs

May 5, 2023 United States

The US-based apparel company will lay off about 1 800 jobs to streamline operations and cut costs, thus joining the list of US companies that have been downsizing over the past months

Gap stated that the layoffs will affect roles at headquarters locations, along with upper field positions, or workers who hold leadership titles outside headquarters offices. In September the company had already laid off about 500 employees. The company is expecting these cuts to result in around 300 million US dollars in annual savings.

“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”, commented Gap's interim CEO, Bob Martin. “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 news comes at a time when the retailer is struggling to return to profitability in a high-inflation environment that naturally reduces consumer spending. In the fiscal year that ended on the 28^th of January, Gap reported a net sales decrease of 6% year-over-year to 15.6 billion US dollars and a net loss of 202 million US dollars, or diluted loss per share of 0.55 US dollars. In addition, the company continues to operate without a permanent CEO following the resignation of Sonia Syngal in July 2022.

Image Credits: gap.co.uk

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