Gap Inc. is cutting 500 corporate jobs as it contends with growing costs and weaker sales figures.
The roles being eliminated are primarily at Gap’s offices in San Francisco and New York, as well as in Asia, the company said Tuesday. The job cuts were reported earlier by the Wall Street Journal.
In August, the retailer pulled its full-year guidance, citing macroeconomic uncertainty and an ongoing search for a new chief executive officer. At the time, Gap Chairman Bob Martin said the company would take “actions to better optimize profitability and cash flow in the near term, reducing operating costs as well as impairing unproductive inventory.”
Last week, the company said it would wind down a partnership with rapper and designer Kanye West, who is known as Ye, after he sent a letter arguing that the company had failed to release apparel and open stores as originally agreed to. The job cuts are unrelated to the winding down of the Yeezy Gap partnership, according to the Journal.
“The company made promises about margin improvement over the next few years which realistically are out of reach,” said Morningstar analyst David Swartz in an interview. “If sales continue to be soft the only way to improve margins then is to cut costs. It’s unfortunate, but the company’s been struggling.”
Other retailers have also dismissed staff in recent weeks. Bed Bath & Beyond Inc. is cutting 20 percent of jobs across its corporate and supply-chain operations as part of a turnaround plan to stabilise the company’s weak finances. And Rent the Runway Inc. said earlier this month that it was firing about a quarter of its non-hourly employees after subscriptions to its fashion rental business unexpectedly fell.
Gap shares fell 4.4 percent at 1:54 p.m. in New York.
By Olivia Rockeman, Jeannette Neumann
Learn more:
Inside Gap Inc.’s 20-Year Struggle to Revive Its Namesake Brand
Why the retail group appears to be in constant turnaround mode — and the measures it may need to take to change the narrative.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Fashion News Click Here
