In an effort to reduce expenses and boost efficiency as the firm strives to return to profitability, Gap is letting go of more than 500 workers.
Uncertainty exists around the precise number of layoffs, but a person with knowledge of the situation claimed that the headcount reduction will be greater than the 500 or so corporate post cuts the company announced in September.
“Our goal is to flatten the organisation, increase spans of control to create more robust roles and individual empowerment, and decrease layers to remove bottlenecks and make better, faster decisions,” Bob Martin, Gap’s chairman and interim CEO, told employees in a memo last week.
On Tuesday, shares of Gap decreased by nearly 6 per cent. This year, the stock has decreased by more than 16 per cent.
Martin said in a March earnings call with investors that the workforce at the garment retailer had been “dampened by a complicated organisational structure, bureaucracy, and outdated processes.” The cuts follow that statement.
He mentioned that Gap intended to reduce the number of management layers in order to “improve the quality and speed of decision-making.” According to Martin, the adjustments will save US $ 300 million, with the first US $ 100 million coming in the fiscal 2023 year.
The company didn’t say how many jobs would be eliminated altogether as part of the restructure at the time, but it did say Asheesh Saksena’s post as Chief Growth Officer would be eliminated.
Mary Beth Laughton, the CEO of Athleta, has also departed the organisation. Sheila Peters, the Chief People Officer, intends to leave her position at the end of the year.
Workers affected by the most recent layoffs at Gap’s international sourcing division were informed on 18th April, and workers at its San Francisco headquarters will be informed this week, the source said.
The individual stated that the finance team members who will be let go would be informed in late May.
The clothing company has had a difficult year as it battled a decline in sales, bloated inventory levels, and a hunt for a new CEO. Its brands include its namesake brand, Old Navy, Banana Republic, and Athleta.
Gap reported US $ 4.24 billion in sales for the three months that ended on January 28 but a net loss of US $ 273 million.
