Gap will lay off about 1,800 employees as part of a broad effort to cut costs and streamline operations, the company said Thursday.
The cuts, first revealed on Tuesday, are more than three times larger than the 500 layoffs it announced in September. The layoffs will affect roles at Gap’s headquarter locations along with upper field positions, or workers such as regional store leaders who hold leadership titles outside of a headquarter office, the company said.
The job cuts come as the apparel retailer struggles to return to profitability while sales sag. The layoffs are expected to result in annualized savings of $300 million, Gap’s interim CEO Bob Martin said in a statement.
Gap expects to see half of those savings in 2023, and expects to complete the layoffs by the end of July, according to a securities filing.
“We are taking the necessary actions to reshape Gap Inc. for the future – simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience,” Martin said in the statement.
“These changes include the consistent brand leadership structures we announced last month aimed at flattening the organizational structure to improve the quality and speed of decision-making, while in turn reducing overhead expense,” he added.
The layoffs will “release untapped potential” across Gap’s brands – its namesake line, Old Navy, Banana Republic and Athleta, 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 said.
Gap shares rose more than 2% on Thursday morning. Gap’s stock has fallen about 16% this year. Shares are hovering above $9, giving the company a market cap of about $3.5 billion.
The layoffs will cost Gap about $100 million to $120 million in aggregate pre-tax costs,…
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