Current News Analysis

 
 
 
Current News Analysis
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Gap Opting To Cut 500 Corporate Jobs
 Wall Street Journals, 20 September 2022 /articles/gap-is-cutting-500-corporate-jobs-11663685456?mod=business_lead_pos1
CNBC, 20 September 2022 /2022/09/20/gap-eliminating-about-500-corporate-jobs-as-sales-fall.html
Facts:
As of September 2022, it is clear that Gap is opting to eliminate approximately 500 of its corporate jobs. The main reason for this decision is that there has been a decline in sales and profits, forcing Gap to eliminate various positions currently open. The layoff will also affect some employees that work in the organization, as they have already been notified of the layoff. According to a retailer representative, there are various matters, such as setbacks in its product assortment at its Old Navy brand, which are also forcing them to take this decision. For the longest time, the product assortment at its Old Navy brand has accounted for almost half of the company's sales. Hence Gap is faced with a financial crisis when this sector is affected.
The main claim is that Gap violated their agreement on several occasions. The other issue reported is that Kanye West, who was an integral partner in this company, had just ended his partnership. Kanye West also accuses Gap of failing to distribute Yeezy products, mainly in their stores, and failing to create dedicated Yeezy Gap stores, which was something previously promised to Kanye West.
The other issue at Gap is that there has been no CEO in the organization since Sonia Syngal stepped down. Hence, in addition to the strain of wanting to get the sales back on track, there is no CEO in the organization. Furthermore, Gap is reported to have withdrawn its 2020 financial outlook. The main reasons for this action are that there are various execution challenges as well as various uncertainties in the macroeconomic environment. For these reasons, a significant percentage of employees will be laid off.
Connection to Concept Material:
The issue of ethical responsibility arises when an organization tries to lay off its employees abruptly. According to corporate social responsibility, employees in an organization have a right to be treated with respect. However, when Gap decides ...