Clothing retail giant the Gap is laying off 500 corporate jobs

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The Gap slated to lay off 500 corporate jobs, more challenges continue to plague the company
The Gap slated to lay off 500 corporate jobs, more challenges continue to plague the company

Image source: The Business of Fashion

The Gap is one of the best-known apparel brands in the industry, but it has suffered significant losses along with other clothing companies.

This year, inflation has dealt a severe blow to the apparel retail sector, forcing many to make tough decisions and let employees go.

While other companies fired their employees at the store, The Gap made the important decision to cut the company’s jobs.

The report

More than 500 corporate jobs are disappearing from the business, which is just one of the factors facing the retailer.

According to several newspapers, the cuts will involve a series of layoffs and open positions in the Gap offices.

In the United States, the New York and San Francisco offices are facing elimination, while the same is happening across Asia.

According to Wall Street, the layoffs have recently begun, accounting for about 5% of Gap’s 8,700 corporate employees.

Sales impact

The layoffs come months after the Gap shared reports of weak first quarter results.

Most of the sales slipped away from the flagship brand and the famous Old Navy chain.

In July, The Gap announced that CEO Sonia Syngal, after less than three years in office, would be stepping down.

An interim CEO would take her place as the company searched for a permanent leader.

Response to the layoffs

GlobalData director Neil Saunders made an analyst note, writing that the decision was practical.

He cited the company’s slowing sales and shrinking retail footprint as factors in the decision.

Saunders also noted that Old Navy (the Gap’s more popular chain) was no longer as strong as it used to be to boost the company’s profits.

“Traditionally, Gap could rely on its old Navy banner to cover some of the sluggishness in other parts of the business,” he wrote.

“However, with the division suffering from supply chain issues and softening demand from the family segment, the whole company is very exposed and needs to take tougher actions to appease investors and present better numbers over the second half of the year.”

Other issues

Last week, rapper Kanye West announced that he would end his two-year association with the Gap, citing “a significant non-compliance.”

Among other things, Ye claimed that the retailer had violated their partnership by not opening Yeezy-branded stores and not distributing his apparel, a deal they had initially reached.

Gap (GPS) also confirmed that it was closing the partnership.

Meanwhile, Gap’s shares fell nearly 3% in trading on Tuesday, while the shares were down 50% over the year.

Reference:

Gap is laying off 500 corporate employees as challenges mount


Opinions expressed by Market Daily contributors are their own.

Lilian Swift

Lilian is currently taking her masters in accountancy and currently works as a public accountant in New York.

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