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Gap plans to cut jobs
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June 21, 2001: 5:28 p.m. ET
Specialty retailer to cut 10,000 headquarter positions by up to 7%
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NEW YORK (CNNfn) - Specialty retailer Gap Inc. announced Thursday that it will reduce five to seven percent of 10,000 headquarter jobs and could take a pretax charge of up to $20 million.
San Francisco-based Gap (GPS: up $0.91 to $33.54, Research, Estimates) is reviewing the nearly 10,000 headquarter positions globally and will cut jobs as opposed to prior plans to grow staff by up to four percent.
The actual number of layoffs will not be known until plans are finalized in the next four to six weeks and pretax charges could be $10 million to $20 million associated with the cuts, the company said in a statement.
Gap reaffirmed its commitment to long term annual earnings growth of at least 15 percent but did not provide specific earnings guidance. Earnings tracker First Call expects 14 cents a share for second quarter and $1 for 2002.
"We're committed to quality long-term earnings growth, with a greater focus on store profitability while continuing to invest in markets that offer attractive growth opportunities," Gap President and CEO Millard Drexler said.
Gap will achieve the reductions through attrition, cutting open spots and layoffs, primarily at its Bay Area headquarter. The retailer also cut it planned annual square footage growth for 2002 and 2003 to 10 percent, from the previously estimated 15 percent. 
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