Fashion retailer Gap is set to sack around 1,800 employees as an attempt to cut costs and streamline operations, the company has said today.
Upcoming job cuts were first revealed on Tuesday, April 25, with roles at headquarter locations, upper field positions and workers including regional store leaders with leadership titles outside a headquarter office set to be impacted.
In a statement, interim CEO Bobby Martin said the redundancies are expected to create an annual saving of around $300 million. He said they are "taking necessary actions" to "reshape" Gap "for the future".
Martin also said the cuts will "release untapped potential" across the company's brands, which include its namesake line, Old Navy, Banana Republic and Athleta.
"We are taking the necessary actions to reshape Gap Inc. for the future - simplifying and optimising our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience," Martin said.
"These changes include the consistent brand leadership structures we announced last month aimed at flattening the organisational structure to improve the quality and speed of decision-making, while in turn reducing overhead expense."
The latest round of job cuts are more than three times larger than the layoffs announced in September, which totalled 500 job cuts.
Talking about the latest cuts Martin said: "This means saying goodbye to friends and team members we care about, and I represent the collective voice of the company in expressing a sincere appreciation to every employee for the dedication, energy, and heart they have given to Gap Inc."
Martin took over as interim CEO in July 2022 after president and CEO Sonia Syngal resigned from her position following falling sales.
In an earnings call in March, Martin did say the company planned to decrease management layers - however he didn't specify how many positions would be cut.
He said "a complicated organisational structure, bureaucracy, and outdated process" had held the company back.
As of the end of January, Gap employed around 95,000 people. But over the last year, the company has battled declining sales, along with bloated inventories and the end of a partnership with rapper Ye.
In the three months to January 28, Gap posted $4.24 billion in sales, which represented a six per cent decrease from the prior-year period and a net loss of $273 million. Annual net losses were reported in both 2020 and 2022.
The redundancies come after popular retailer Buy Buy Baby started its closing down sale yesterday after the company went into liquidation.
The beloved high street retailer, which was bought by Bed Bath & Beyond in 2007, will close all of its 120 stores across the US after filing for bankruptcy.
Bed Bath & Beyond, who have also filed for bankruptcy, has already closed five Buy Buy Baby locations so far this year.
"We have made the difficult decision to begin winding down operations," a statement reads on the retailer's website.
"Thank you to all of our loyal customers. We have made the difficult decision to begin winding down our operations. Bed Bath & Beyond and Buy Buy Baby stores remain open to serve you."
