WSJ: Gap to Lay Off 500 Workers as it ‘Flattens the Organization’

Gap will reportedly eliminate approximately 500 corporate jobs globally as part of a restructuring effort, people familiar with the matter told The Wall Street Journal. The cuts, which will be focused on Gap’s main offices in San Francisco and New York City, are designed to make its operations more nimble and less bureaucratic.

The move is part of a larger effort to save about $300 million annually by stripping out layers of management, including eliminating the Chief Growth Officer role. The company didn’t specify how many workers would be affected when it made the announcement, but noted that it was creating a consistent organizational structure across the Gap, Old Navy, Banana Republic and Athleta brands.

“Our goal is to flatten the organization, increase spans of control to create more robust roles and individual empowerment, and decrease layers to remove bottlenecks and make better, faster decisions,” said Bob Martin, Chairman and Interim CEO in a memo to employees seen by The Wall Street Journal.

The sources told the Journal that Gap had become “too siloed,” with executives who are more worried about protecting their own turf than creating products that resonate with shoppers. As a result, style decisions became bogged down in meetings.

Gap isn’t alone among retailers laying off workers as they tighten their belts:

• David’s Bridal laid off 9,000 workers and filed for Chapter 11 bankruptcy protection;
• Saks.com, which is planning to let at least 100 employees go, approximately 5% of its workforce; and
• Wayfair, which laid off 1,750 employees, 10% of its global workforce, in a bid to improve its agility.