With coronavirus-induced store closures extending into April, Gap Inc. is the latest company to furlough workers.
The San Francisco-based apparel giant announced on Monday that it will place the majority of its store teams in the U.S. and Canada on unpaid leave. Workers will continue to receive applicable benefits while on furlough. The company has also decided to reduce headcount across its corporate functions, and the entire leadership team and board of directors are taking a temporary cut in pay.
“After taking the extraordinary measures of temporarily closing all of our company-owned stores in North America and Europe two weeks ago, we are now in a position where we must take deeper actions. Each decision, however difficult, has been made to ensure that we build toward a future where Gap Inc. can come out of this stronger — for our customers, our shareholders and, most importantly, our teams,” stated Sonia Syngal, president and CEO, Gap Inc. “We know that tens of thousands of people rely on us to support themselves and their families, and that millions more around the world rely on our business. We are doing everything we can to provide support during this time, and we are intensely focused on welcoming back our store teams and customers as soon as we are able.”
Gap Inc. stock prices have fallen by more than half since 2018. The company had planned to spin off Old Navy through an IPO but nixed that idea in January, citing the “cost and complexity” of splitting into two companies, coupled with softness in its overall performance. Gap Inc. has gone through a series of recent executive changes, with CEO Syngal taking the reins earlier this month. Additionally, Old Navy finance chief Katrina O’Connell has moved into the CFO role at Gap Inc. Nancy Green, Old Navy president and chief creative officer, is leading the brand as it continues to search for a new president and executive chief.
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