Report: GAP to Cut 1,800 Corporate Jobs, ‘Mainly in San Francisco and New York’

Gap Inc. is eliminating 1,800 corporate jobs, “mainly in San Francisco and New York,” as part of an effort to make the company “more nimble and less bureaucratic,” the Wall Street Journal reported Thursday.

The company, whose brands include Gap, Old Navy, Banana Republic and Athleta, said the job cuts are expected to result in $300 million in annualized savings. The move is part of a plan the company introduced in March, according to the report.

Upon the announcement, shares of the retail chain rose more than one percent in morning trading, according to the report. The company already cut approximately 500 corporate jobs in September, which is said would save them $250 million annually. 

“We are taking the necessary actions to reshape Gap Inc. for the future—simplifying and optimizing our operating model, elevating creativity, and driving better delivery in every dimension of the customer experience,” Gap interim Chief Executive Bob Martin said in a statement.

Worldwide as of January, Gap Inc. employed roughly 95,000 people, most of whom work in retail locations. Nine percent of its staff work in company headquarters locations, according to the report.

“Prior to the announcement, the leaders of each of the company’s brands…have been conducting a wide-ranging review with the goal of stripping out layers of management to speed decision making, people familiar with the situation said. One result from the initiative will be creating a consistent organizational structure across the brands, the company said,” the report states. 

The company estimated the jobs cuts could cost the company roughly $100 million to $120 million, the report states, citing a Thursday securities filing.

The filing allegedly detailed that actions associated with job reductions would be mostly complete by the end of July.