US-based apparel chain Gap has planned to cut about 500 corporate jobs following weak sales, The Wall Street Journal (WSJ) has reported.
The jobs to be cut are based at Gap‘s offices in San Francisco and New York, US, as well as in Asia.
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In a memo reviewed by WSJ, Gap executive chairman and interim CEO Bob Martin said: “We’ve let our operating costs increase at a faster rate than our sales, and in turn our profitability.”
In response to the report, the retailer’s shares fell by 3.2% on Tuesday.
The announcement comes after the retailer reported last month that its total company sales were down by 8% to $3.86bn in the second quarter (Q2) of fiscal 2022 (FY22).
In an earnings call, Gap finance chief Katrina O’Connell said the company would implement, among other actions, ‘a reduction in overhead investments, including a pause on planned hiring and open positions’ in the third quarter.
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By GlobalDataThe actions are expected to ‘position Gap back on its path toward growth margin expansion and delivering long-term value for its shareholders’.
Gap had approximately 97,000 employees as of 29 January this year. Around 9% employees worked at the retailer’s headquarters.
The company is currently in a CEO transition following the departure of former CEO Sonia Syngal in July.
Earlier this month, US-based homeware retailer Bed Bath & Beyond announced plans to close around 150 underperforming stores and cut its workforce by 20% as part of a major restructuring.
The retailer is reducing its workforce by approximately 20% across its corporate operations and supply chain.
Last month, US-based retail giant Walmart reportedly confirmed it had begun cutting around 200 corporate jobs as part of a restructuring effort.
The company did not disclose the numbers of workers that would be affected or which divisions had experienced cuts.
