Gap Inc., in a move reflecting ongoing weak financial performance, has decided to eliminate roughly 500 jobs, including filled and vacant positions, at its corporate offices in San Francisco, California, and New York.
The company for several seasons has been downsizing and reducing staff, but primarily through streamlining the Gap and Banana Republic store fleets.
The corporate downsizing is just the latest bad news besetting the specialty retailer. Last week, the Yeezy Gap strategy collapsed, with Kanye West’s Yeezy brand ending its contract with Gap after West, who now goes by Ye, said he was suing the retailer. Gap Inc. fell into the red in the second quarter due to macro headwinds, sales declines and persistent issues of its own. And in July, president and chief executive officer Sonia Syngal abruptly left the company.
The Wall Street Journal on Tuesday first reported the corporate layoffs and calculated that they represented roughly 5 percent of the Gap’s 8,700 corporate employees. The maneuver will help the bottom line but more must be done to get the company back on track for the future and recapture the glow that Gap and Old Navy once had. However, Banana Republic has made strides by improving its fashion and seeing some recent lifts in sales.
The breakup between Ye and Gap was hardly surprising considering for the two years after the deal was announced there was widespread skepticism that the collaboration would ever work out, and with Yeezy Gap gaining no traction. There has only been limited product drops on occasion so far, and Ye has accused the retailer of failing to fulfill certain contractual obligations, such as creating Yeezy Gap-branded stores. His lawyer Nicholas Gravante said in a statement last Thursday that Ye was left with “no choice but to terminate their collaboration.”
Syngal has been replaced on an interim basis by Bob Martin, executive chairman of the board, until the company can find a permanent replacement. Additionally, Walmart Inc. executive Horacio “Haio” Barbeito became president and CEO of Old Navy, the value and family-oriented chain, and Gap’s biggest division, succeeding Nancy Green, who left in late April.