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- Gap announced Thursday it will reduce the number of managers in order to cut costs.
- It also announced a $273 Million net loss for the most recent quarter.
- Meta and Twitter also have been cutting back on management positions in recent weeks.
Middle managers are not only being eliminated in the tech industry. Gap announced Thursday it will be reducing the number of middle managers to lower costs and make the company more agile.
This clothing retailer also owns Old Navy and Banana Republic. It has been struggling for many years due to shoppers switching to cheaper or trendier brands. It reported a net loss in 2022 of $273 million, after the group sales dropped 6%.
Gap, which has no permanent CEO, estimates that it will save $300,000,000 by "increasing spans and decreasing management layers" The company also announced that it will no longer have a chief growth officer.
Gap also announced the departure of Athleta's CEO immediately and the resignation of its chief people officer at the end. They will both be replaced.
Gap's decision by to simplify its management structure echos a trend within the corporate world where companies are cutting back on workers they consider unnecessary.
Mark Zuckerberg stated in February that Meta was "removing certain layers of middle management to speed up decisions," and employees were given the opportunity to change to non-management positions or to quit.
Elon Musk's drastic slashing Twitter's workforce primarily targeted managers. Salesforce CEO Marc Benioff said that Insider asked tech bosses: "Do they have to unleash their own Elon in them?"
Gap laid off approximately 500 employees last September. This was just a week after Gap cut ties to Ye, the rapper-designer who was formerly known by Kanye West. His antisemitic rant ended several Yeezy partnerships.
GlobalData Retail's Neil Saunders told clients this week that gap is akin to a lazy student who has the ability but lacks the will or the discipline to produce a better performance.
He said that revenue is falling across all its brands and Old Navy, once considered to be its saving grace, is now "in serious danger" of becoming boring and bland like Gap.
Gap did not respond immediately to Insider's request for comment, which was made outside of normal business hours.
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By: psyme@insider.com (Pete Syme)
Title: Gap says it’s getting rid of some managers as sales slide. One retail expert likens the company to a ‘lazy student’ unwilling to deliver a ‘better performance.’
Sourced From: www.businessinsider.com/gap-joins-firing-managers-trend-sales-old-navy-slow-2023-3
Published Date: Fri, 10 Mar 2023 13:10:00 +0000
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