Gap confirms restructuring plan, to reduce workforce by 1,800 employees

In a regulatory filing, Gap confirmed that it is committed to a restructuring plan that includes a reduction of the company’s headquarters and upper field workforce by approximately 1,800 employees. Gap said: "The Company estimates that it will incur approximately $100M-$120M in aggregate pre-tax costs in connection with the Plan, which consists of approximately $75M-$85M in employee-related costs and $25M-$35M in consulting and other associated costs. The Company estimates that it will incur substantially all of the costs in the form of future cash expenditures. The actions associated with the reduction of the Company’s workforce under the Plan are expected to be substantially completed by the end of the first half of fiscal 2023." The company continues to expect that the actions to further simplify and optimize its operating model and structure, including the reduction of its workforce under the Plan, will result in annualized pre-tax savings of approximately $300M, of which approximately half is expected to be realized in 2023.