Gap Inc. is starting a new round of corporate job cuts, according to an internal memo reviewed by Bloomberg, as it struggles to turn around performance without a permanent chief executive officer.
(Bloomberg) — Gap Inc. is starting a new round of corporate job cuts, according to an internal memo reviewed by Bloomberg, as it struggles to turn around performance without a permanent chief executive officer.
Meant to trim management layers and speed up decision making, the reduction will be larger than the 500 corporate positions Gap eliminated in September, the Wall Street Journal reported earlier Tuesday. The company expects to save about $300 million in annual expenses as part of a broader restructuring plan, interim CEO Bob Martin has said.
Cuts are occurring in three phases, beginning with the international sourcing division this month, according to the memo. Roles across brands in headquarters will be next, followed by layoffs in finance in May.
“This might be the last step in an overhaul before the company names its new CEO, which we expect any day,” Mary Ross Gilbert, an analyst at Bloomberg Intelligence, said in a note to clients.
Gap has yet to hire a new CEO since Sonia Syngal was ousted last July. Last month, the company announced several executive changes in an effort to “optimize” its corporate structure as performance declined across the company’s business units. Comparable sales fell at all four of the apparel maker’s biggest brands: Gap, Old Navy, Banana Republic and Athleta.
The San Francisco-based company had about 95,000 employees as of January, largely in retail positions.
Shares had fallen 11% this year through Monday’s close. The stock was down 7% at 1:10 p.m. Tuesday in New York.
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