Gap announces more actions estimated to result in $300M in annualized savings

Gap announced actions to further simplify and optimize its operating model and structure, including actions such as increasing spans of control and decreasing management layers to improve quality and speed of decision making, as well as creating a consistent organizational structure across all four brands focused on elevating its product and customer experience across all channels. These actions are estimated to result in $300 million in annualized savings, of which roughly half is expected to be realized in the back half of fiscal 2023. These actions will incur severance and other related costs which the company anticipates adjusting out of its reported operating and net income. As a result of the company optimizing its operating structure, the role of Chief Growth Officer held by Asheesh Saksena will be eliminated effective today. These actions are on top of the $250 million in annualized savings the company announced in the third quarter of fiscal 2022. Accordingly, over the last six months, the company has identified $550 million in annualized savings in total. The company continues to believe there are opportunities to further optimize its marketing spend and rationalize its technology investments over the next few years. Gap Inc.’s leadership has been working with external advisors on these efforts with the overall intention of optimizing and simplifying its operating structure to drive profitability and cash flow over the long term.