Gap slashes 500 corporate jobs in cost-cutting move
NEW YORK (AP) — Gap is slashing 500 corporate jobs in San Francisco and New York as it looks to reduce expenses amid languishing sales.
The job cuts, confirmed by a company spokesperson, follow years of struggle at the San Francisco-based retailer, which operates its namesake stores as well as the Old Navy, Banana Republic and Athleta chains.
The pandemic and surging supply chain costs have exerted even more of a financial toll on the retailer. And last week, Gap and Kanye West ended their partnership to distribute the rap artist’s Yeezy clothing line. The partnership was announced two years ago with much fanfare.
As of Jan. 29, the company had a workforce of roughly 97,000 employees; 9% of them or roughly 8,700, work in corporate sites, according to its latest annual report.
The news comes as a string of other retailers have trimmed their staffing including Walmart, Best Buy and Peloton. Home goods retailer Bed Bath & Beyond, based in Union, New Jersey, said earlier this month that it will close about 150 of its namesakes stores and slash its workforce by 20%.
Gap’s executive chairman Bob Martin, who is also the interim CEO of Gap Inc., noted in August that the company plans to reduce operating costs to increase profitability. Martin is presiding over the helm as the company looks to fill the vacancy left when Gap CEO Sonia Syngal stepped down in July.
For the three-month period ended July 30, Gap reported an 8% drop in net sales. By brand, Gap posted a 10% decline, while Old Navy, once a bright spot, saw a 13% drop as the division caters to lower-income shoppers who have been hit by surging inflation. Banana Republic’s sales rose 9% and Athleta’s sales rose 1%. The company swung to a loss of $49 million in the quarter, compared to a profit of $258 million in the year-ago period.
The news of Gap’s layoffs was first reported by The Wall Street Journal.
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