Gap is slashing 500 corporate jobs in San Francisco and New York in order to reduce expenses amid falling sales.
As of Jan. 29 the headcount stood at roughly 97,000 employees.
9% of them or roughly 8,700, work in corporate sites.
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Plagued by declining value
The job cuts follow years of struggle at the San Francisco-based retailer, which operates its namesake stores as well as the Old Navy, Banana Republic and Athleta chains.
For the three-month period ended July 30, Gap reported an 8% drop in net sales.
Old Navy, once a bright spot, saw a 13% drop as the division caters to lower-income shoppers who have been hit by surging inflation.
It has been battered by the pandemic and surging supply chain costs exacting even more of a financial toll on the retailer.
Other issues facing Gap
The company swung to a loss of $49 million in the quarter, compared to a profit of $258 million in the year-ago period.
On top of that, soaring inflation and declining consumer spending have had a negative impact on sales.
The company was also left with surplus goods after an attempt to create inclusive clothing sizes backfired.
Fellow retailers following suit
Other retailers have been following the same path as Gap.
Walmart, Best Buy and Peloton are some that have trimmed their staffing.
Home goods retailer Bed Bath & Beyond announced plans to shut about 150 of its namesakes stores and slash its workforce by 20%.
Leadership shuffle
Gap’s executive chairman Bob Martin, who is also the interim CEO announced plans to reduce operating costs to increase profitability.
Martin is presiding over the helm as the company looks to fill the vacancy left when Gap CEO Sonia Syngal stepped down in July after her turnaround efforts flopped.