Gap Inc. is laying off about 500 corporate employees, with some employees already notified, according to a report by The Wall Street Journal which Gap confirmed with Retail Dive.
The jobs cover a variety of departments and are mostly located at Gap’s offices in San Francisco and New York, as well as in Asia.
“We’ve let our operating costs increase at a faster rate than our sales, and in turn our profitability,” said interim CEO Bob Martin in a memo to employees reviewed by The Wall Street Journal.
The layoffs are reportedly unrelated to last week’s news that Gap conceded to end its partnership with Ye, commonly known as Kanye West.
Gap’s most recent earnings report in August highlighted declining sales across most of its brand portfolio. Its second-quarter net sales fell 8% year over year to $3.86 billion, with both e-commerce and store sales contributing to the decline. The retailer’s net loss widened to $49 million compared to last year’s $258 million in net income. Old Navy’s net sales fell 13% and the Gap brand’s sales dropped 10%. While Athleta’s sales increased 1% comps fell 8%.
At the time, Martin hinted at the company’s need to reduce operating costs, stating “We are taking actions to better optimize profitability and cash flow in the near term, reducing operating costs as well as impairing unproductive inventory.”
