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Gap to lay off 1,800 employees in drive for profitability

Gap

Gap to eliminate 1,800 employees in a push for profitability

Gap plans to cut 1,800 jobs in three rounds to cut costs amid sluggish sales and bloated inventory.

The affected positions are mainly at its San Francisco and New York headquarters.

The restructuring will remove some upper-field jobs, like leadership roles in regional stores outside of a headquarters office.

Read More: Gap to cut 500 corporate jobs as it strives for profitability

The announcement follows the clothing giant revealing it plans to cut more than 500 corporate layoffs.

The struggling retailer expects to save $300 million annually through the cuts.

Gap expects to save half in 2023 and complete the job cuts by July end.

Last week, Interim CEO Martin announced the cuts through a company memo, where those axed from the international sourcing unit were informed on April 18 and 19.

Read More: 3M to cut 6,000 jobs to save $700 million

Staff in headquarters and upper field level were notified on Thursday, April 27, and today (April 28). 

However, staff leaving the finance division will be told in the last week of May.

Martin said: “On the dates outlined above, we support remote work and recommend reducing or eliminating meetings to create space for teams. 

“Each senior leader will follow up with their organizations when their notifications are complete.”

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Mr.Martin outlined plans to trim management layers but didn’t say how many jobs would be lost in an earnings call in March. 

He pointed out Gap staff has been “dampened by a complicated organizational structure, bureaucracy, and outdated processes” that had stifled the company's growth. 

Martin’s last week memo noted that the company’s new operating and leadership structure hopes to address those issues.

It will thin out “layers to remove bottlenecks and make better, faster decisions.”

Source: CNBC

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