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Gap Inc. is cutting 500 corporate jobs as it continues to search for a permanent CEO and it seeks to come up with answers to buoy its top and bottom lines following a second quarter that saw it report a  10 percent decline in comp sales and a net loss of $49 million.

The apparel retailer is eliminating jobs that are currently open and laying off staff primarily in its offices in New York and San Francisco, according to The Wall Street Journal, which first reported the news.

The Journal reviewed an internal memo sent yesterday to employees from Bob Martin, Gap’s executive chairman and interim CEO. Mr. Martin, who has decades of retail experience including serving as CEO of Walmart’s international business, stepped into the interim CEO role in July following Sonia Syngal’s departure from the company.

“We’ve let our operating costs increase at a faster rate than our sales, and in turn our profitability,” he wrote.

The problems facing the Gap banner have been ongoing for years forcing the chain to close stores and shift its real estate strategy from operating in malls to seeking standalone locations.

The chain’s Old Navy business, which for years had been relied on for consistent growth, has seen its business go in the wrong direction with much of its troubles attributed to fashion miscues and lost share to discounters and off-pricers. Old Navy has also taken hits from COVID-19-related factory closures and more recently the slow down in discretionary spending by Americans trying to navigate through a period of high inflation.


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