Gap to Lay Off 1,800 Employees as Part of Restructuring Plan
Gap Inc. will cut approximately 1,800 jobs from its headquarters and upper-field workforce as it seeks to “simplify and optimize its operating model and structure,” according to an April 25, 2023 SEC filing. The layoffs, which will cost Gap $100 to $120 million in employee-related and consulting costs, are expected to be completed by July 2023.
The 1,800 jobs are more than 3X the 500 corporate jobs reported to be on the chopping block by the Wall Street Journal earlier this week.
Gap has been attempting to cut costs as it struggles with weak sales. For fiscal 2022, which ended Jan. 28, 2023, net sales of $15.6 billion represented a 6% decline compared to the previous year, and comparable sales dropped 7% YoY. In Q4 2022, net sales of $4.24 billion were 6% lower than the same period the previous year, with comparable sales down 5% YoY.
“To enter fiscal 2023 in a more competitive position, we took quick and effective action to clear excess inventory, improve assortment balance, particularly at Old Navy, and to meaningfully optimize our cost structure, resulting in $550 million in annualized savings identified to date,” said Bob Martin, Gap Inc. Executive Chairman and Interim CEO in the March 9, 2023 press release discussing the company’s Q4 and FY 2022 results.
At that time, Martin also indicated that the company’s Board is close to choosing a new CEO. He was named Interim CEO in July 2022 following the departure of CEO and President Sonia Syngal.