The Gap to lay off 1,800 workers | CBC News

Gap Inc. said on Thursday it would cut about 1,800 jobs in a second round of layoffs in the last 12 months, joining a set of big U.S. companies that are downsizing in earnest as high inflation eats into consumer wallets.

It’s not known how many, if any, of the jobs to be cut will be in Canada. The California-based retailer told CBC News in a statement it “can’t comment for the record or share any specifics about Canada.”

In September, Gap eliminated about 500 corporate workers across a range of departments as it struggled to protect margins and battled weak sales. As of Jan. 28, the apparel chain had about 95,000 employees, according to a regulatory filing.

Mass layoffs to rein in costs have swept across the economy over the past months, from tech giants such as Facebook-parent Meta Platforms Inc. and Alphabet Inc. to Canadian e-commerce company Shopify.

Gap said it expects the layoffs will cost up to $120 million US in aggregate pre-tax costs as a result of the workforce reduction, which is expected to be completed by the end of the first half of fiscal 2023.

The Wall Street Journal first reported on the new round of job cuts earlier this week.

Weak financial results

In March, Gap posted a bigger-than-expected fourth-quarter loss and forecast 2023 sales below estimates, hurt by slowing demand for its apparel and challenges around outdated inventory at its Old Navy brand.

Consumers, especially at the lower- to mid-income rung, have curbed spending on non-essential items, impacting sales of apparel with all of Gap’s four brands posting a fall in sales in the fourth quarter.

The company is in the middle of a CEO transition after Sonia Syngal stepped down last year, and is currently led on an interim basis by Executive Chairman Bob Martin.