Gap Inc., the parent company of clothing brand Banana Republic, has announced that it will lay off around 1,800 employees as concerns over an economic recession in the United States continue to grow. The move is expected to result in about $100 million to $120 million in aggregate pre-tax costs, with employee-related expenses making up the bulk of this. The company expects the workforce reduction to be completed by the end of the first half of fiscal 2023.
This is not the first time that Gap has reduced its workforce. In September, the company eliminated approximately 500 corporate workers across different departments, with most of these roles being based in San Francisco, New York, and Asia. The decision to lay off workers comes after Gap posted a larger-than-expected fourth-quarter loss in March, and predicted sales below estimates for 2023 due to a weakened demand for its apparel and outdated inventory.
Gap is not alone in its decision to reduce its workforce. Other companies like Facebook-parent Meta Platforms Inc., Alphabet Inc., Clorox Co., and Wayfair Inc. have also announced workforce reductions in an effort to cut costs and prepare for an anticipated global economic downturn.
The move is expected to affect a significant number of employees and has been met with concern from workers and analysts alike. The economic uncertainty created by the pandemic continues to be a challenge for many businesses, and the impact is being felt by employees worldwide.
