Gap to Lay Off 500 in Cost-Cutting Move

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The Gap($NYSE:GPS) is set to reduce its corporate headcount by about 500 in a move to “reduce expenses at the apparel retailer amid declining sales and profits,” according to the Wall Street Journal. The report said that pink slips should hit desks at the not only in the retailer’s main offices in San Francisco and New York, but in Asia as well. Job openings are also reportedly being eliminated. This move comes as the company tries to boost its bottom line amid declining sales and profits.

Market Price

On Tuesday, GAP stock opened at $9.4 and closed at $9.2, down 3.3% from the prior closing price of $9.5. This move is one of several the company has made in recent months in an effort to improve its financial situation. While it remains to be seen whether or not these measures will be successful, it is clear that the company is facing some challenges.

VI Analysis

Gap Inc is a publicly traded company with a market capitalization of over $10 billion. According to the VI Star Chart, Gap Inc is strong in terms of its cash flow, asset management, and dividend payments, and is medium in terms of profitability and growth. The company is classified as a “cow”, a type of company that has the track record of paying out consistent and sustainable dividends.

Dividend-paying companies are generally deemed to be less risky, as they pursue growth at a sustainable rate. Gap Inc has an intermediate health score of 6/10 with regard to its cash flows and debt, and is therefore likely to be able to sustain future operations in times of crisis.

Summary

The move comes as the company looks to cut costs in the face of declining sales. The company has been struggling to turn things around in recent years, and this latest move is likely to further pressure the stock price. investors should tread carefully with Gap shares.