Gap will cut 1,800 corporate jobs

The Gap Inc. GPS 1.50% company has announced it will be laying off 1,800 workers as part of a broad restructuring intended to invigorate the company and enable it to become more nimble and less bureaucratic.

‍

As part of a restructuring plan outlined in March, the company expects to generate $300 million in annualized savings from the job cuts as a result of the job cuts, it was reported on Thursday. Some of the positions that are being eliminated are primarily at its headquarters in San Francisco and New York as well as some senior positions in the field.

‍

The shares of the retail chain rose more than 1% in morning trading as well.

‍

In September, Gap cut roughly 500 corporate positions in an attempt to save approximately $250 million annually through this move.

‍

Bob Martin, Gap Inc.'s interim Chief Executive, told the newspaper in a statement that the company was taking the necessary steps to reshape Gap Inc. for the future–including simplifying and optimizing our operating model, elevating creativity, and delivering a superior customer experience at every level.

‍

There were approximately 95,000 employees in the company as of late January, with most of them working in retail outlets around the world. There are approximately 9% of its employees working at the company's headquarters, according to the company. 

‍

As a result, the leaders of each of the company's brands, including Gap, Old Navy, Banana Republic, and Athleta, conducted a thorough review before the announcement last week. Their goal was to strip out layers of management that made decisions slower to speed up the decision-making process, people familiar with the matter said. Among the results of this initiative, the company said, will be the creation of a consistent organizational structure across all of the brands.

‍

It is estimated that Gap will incur approximately $100 million to $120 million in costs in connection with the job cuts, according to a filing the company made on Thursday. As per the filing, the majority of the actions associated with the workforce reductions should be completed by the end of July.