Gap Inc said on Thursday it would reduce its workforce by about 1,800 employees, joining various other U.S. companies in announcing layoffs as worries of an economic recession in the United States continue to grow.
The Banana Republic parent said it expects to take on about $100 million to $120 million in aggregate pre-tax costs – consisting of about $75 million to $85 million in employee-related expenses – as a result of the workforce reduction expected to be completed by the end of the first half of fiscal 2023.
In September, Gap eliminated about 500 corporate workers across a range of departments. The roles were mainly based at its offices in San Francisco, New York and in Asia.
In March, Gap posted a bigger-than-expected fourth-quarter loss and forecast 2023 sales below estimates, on weakening demand for its apparel and as it battles outdated inventory at its Old Navy brand.
The Wall Street Journal first reported on the new round of job cuts earlier this week.
As of January 28, 2023, the apparel chain had a workforce of about 95,000 employees, according to a regulatory filing.
Facebook-parent Meta Platforms Inc, Alphabet Inc and retailers like Clorox Co and Wayfair Inc have all announced workforce reduction to rein in costs in anticipation of a global economic downturn.
(Reporting by Anne Florentyna Gnanaraja Sekar and Ananya Mariam Rajesh in Bengaluru; Editing by Savio D’Souza and Nivedita Bhattacharjee)
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