Gap Inc. is eliminating about 500 corporate jobs, according to people familiar with the matter, moving to reduce expenses at the apparel retailer amid declining sales and profits.
The jobs are mainly at Gap’s
GPS,
main offices in San Francisco and New York as well as in Asia, the people said. The company is laying off staff and eliminating positions that are currently open across a range of departments. Some employees have been notified of the layoffs in recent days, the people said.
“We’ve let our operating costs increase at a faster rate than our sales, and in turn our profitability,” Bob Martin, Gap’s executive chairman and interim CEO, wrote in a memo to employees on Tuesday notifying them of the job cuts, according to a copy reviewed by The Wall Street Journal.
The company has endured years of slumping sales at the flagship Gap brand and, more recently, problems at the Old Navy chain, which accounts for more than half of total revenue. Sales at Old Navy took a hit this year after an attempt to make inclusive clothing sizes backfired, leaving it with surplus goods. The company is searching for a permanent chief executive after the resignation of Sonia Syngal in July.
Also read: Gap confirms it’s parting ways with Kanye West: report.
An expanded version of this report appears at WSJ.com.
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