Gap Inc.

Gap Inc. —. American retailer clothes

History

2023: Shedding 1,800 employees as U.S. clothing sales slump

On April 27, 2023, the American company Gap, the largest in, USA retailer clothes reported a reduction of approximately 1800 employees. The relevant notice has been sent to U.S. Securities and Exchange Commission the (SEC).

Gap is cutting 1,800 employees as clothing sales slump in the US
Photograph: independent.co.uk/Getty

Gap staff as of the end of January 2023 was approximately 95 thousand people. Layoffs are aimed at optimizing the organizational structure and reducing costs. The cuts will primarily affect the staff of the company's headquarters and senior employees. In September 2022, the company laid off about 500 workers.

The costs associated with the reorganization are estimated at $100 million to $120 million. Of these, from $75 million to $85 million will go to payments of severance pay and other compensation to dismissed employees. Another $25 million to $35 million will be consulting costs and associated losses. Staff reductions are scheduled to be completed by the end of July 2023. In the long term, this initiative will provide savings of approximately $300 million per year.

"We are taking the necessary action to transform Gap with an eye to the future - simplifying and optimising the operating model, increasing creativity and improving customer service. However, this means saying goodbye to friends and team members that we care about, "said Gap Acting CEO Bob Martin.

The restructuring will free up "untapped potential" for Gap brands including Old Navy, Banana Republic and Athleta, he said. It is noted that in the current macroeconomic situation, consumers, especially those with low and middle incomes, reduced spending on secondary goods, which affected clothing sales. As a result, all Gap brands faced falling sales and declining revenue.^[1]

Notes