Gap Inc. is adding to its workforce reductions announced in September, which involved laying off about 500 people in its corporate offices, the company confirmed by email. A spokesperson declined to say how many more employees will be affected.
People in the retailer’s international sourcing division, San Francisco headquarters and finance team will be affected, according to The Wall Street Journal, which first reported the news.
The effort goes beyond cost-cutting to reflect a new focus articulated by interim CEO and Chairman Bob Martin in March, the spokesperson said. At that time, executives said expense cuts, including a shakeup in its C-suite, would bring some $300 million in annualized savings. The company has eliminated the role of chief growth officer. Athleta CEO Mary Beth Laughton has left and Chief People Officer Sheila Peters will leave at the end of the year, although those two are expected to be replaced.
“We announced a simplified leadership and operating structure to further optimize cost and organizational effectiveness while enabling a return to the cultural relevance and creative focus that has always been the heartbeat of Gap Inc.,” Martin told analysts then. “We are flattening the organization by increasing spans of control and decreasing management layers to improve the quality and speed of decision-making, starting with our leadership team.”
He offered similar rationale in an internal memo to employees cited by the Journal on Tuesday. The move comes amid ongoing struggles, with fourth quarter sales declines at all of the company’s brands. In 2022, Gap Inc. swung into the red with a $202 million net loss, compared to $256 million in net income in 2021.
Martin also told analysts in March that the company was close to naming a permanent CEO, though none has been announced yet.