Latest round of layoffs at Gap Inc. reveal gaps in corporate strategy, analysts say
Latest round of layoffs at Gap Inc. reveal gaps in corporate strategy, analysts say
A new wave of layoffs is coming to Gap Inc., the parent of apparel mainstays Old Navy, Banana Republic and, of course, The Gap.
The company is cutting 1,800 corporate jobs, layoffs that come on the heels of approximately 500 positions cut this past fall.
The retail business is tough and always has been, and the pandemic didn’t do the industry any favors, said former retail CEO Mark Cohen, who’s now at Columbia Business School.
Gap — once an iconic purveyor of blue jeans — has been on its back foot for years, he said.
“This is a business that just doesn’t have any leadership and doesn’t have a go-forward strategy that it can rely upon,” Cohen said.
Gap’s interim CEO said in a statement that these job cuts are part of a strategy to simplify its operations. The company has been navigating a slowing economy and consumers spooked by inflation.
But Sonia Lapinsky of AlixPartners warns that mass retailers can’t cut their way to better performance.
“You’ve got to have a pragmatic and thoughtful approach to reorient, to regrow rather than just cutting across the board as revenues fall off a cliff,” she said.
Gap Inc. estimates the cuts will save $300 million annually.
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