Gap to lay off 1,800 employees
Gap eliminated 500 corporate jobs in September
Gap said Thursday that it will lay off 1,800 employees as it seeks to rein in costs and streamline operations.
The cuts, which will affect workers at the company's headquarters and upper field workforce, are part of a restructuring plan that will help the company save millions in operating costs, according to a filing with the Securities and Exchange Commission (SEC).
In March, the company, whose portfolio includes Old Navy, Gap, Banana Republic, and Athleta brands, announced it was taking several actions to "simplify and optimize its operating model and structure," including decreasing management layers and creating a more consistent organizational structure across it brands, according to the filing.
GAP IS CUTTING 500 CORPORATE JOBS
Interim CEO Bob Martin said in a statement that the company is "taking the necessary actions to reshape Gap Inc. for the future."
"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 continued.
The company expects the actions announced in March to further simplify and optimize operations, including the reduction of its workforce, will result in annualized pre-tax savings of approximately $300 million.
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In September, the company eliminated 500 corporate jobs in San Francisco and New York. The cuts came shortly after Martin said in August that the company plans to reduce operating costs to increase profitability.
Gap reported that net sales fell 6% to $15.62 billion for fiscal year 2022, which ended on Jan. 28. Sales at stores open for at least a year were also down 7% year over year.
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Martin took the helm as the company looks to fill the vacancy left when Gap CEO Sonia Syngal stepped down in July.
Gap joined a growing list of companies that have trimmed their workforces in recent months as economic uncertainty weighs on operations. The move follows Wall Street titans including Goldman Sachs and tech giants such as Amazon and Google parent Alphabet.
The Associated Press contributed to this report.