updated 8/9/2007 2:28:45 PM ET 2007-08-09T18:28:45

Gap Inc. has jettisoned 1,500 workers so far this year in a purge driven by a three-year sales slump.

The job cuts, disclosed Thursday as part of the San Francisco-based company’s monthly sales report, weren’t a surprise. Management confirmed in May that some workers would be laid off to help bring expenses more in line with Gap’s shrinking revenue as more people shopped elsewhere.

Gap hadn’t revealed how many of its 154,000 workers would be released. The job cuts disclosed Thursday translated into about 1 percent of the company’s payroll, within the range that industry analysts had anticipated.

The company handed out about 1,100 pink slips during its fiscal second quarter, a 13-week period ending Aug. 4. Another 400 jobs were cut earlier in the year, Gap said Thursday.

The payroll reductions in Gap’s ongoing operations don’t include workers let go as part of the recent closure of an experimental chain called Forth & Towne that catered to women 35 years and older.

Including Forth & Towne’s demise, Gap has eliminated about 2,000 jobs this year.

Besides the chain that shares the corporate name, Gap also owns Old Navy and Banana Republic.

Gap didn’t quantify how much money it expected to save from second-quarter streamlining. In a recorded message Thursday, management said it would provide additional details about its cost-cutting plans Aug. 23 when the company is scheduled to release second-quarter earnings.

Stung by a succession of fashion missteps, most of Gap’s stores have steadily been losing customers. Gap’s same-store sales have fallen in 12 consecutive quarters, including a 5 percent decrease in the most recent 13-week period. The closely watched yardstick measures sales at stores open at least a year.

As part of its turnaround efforts, Gap recently hired a new chief executive — Glenn Murphy, a fashion industry outsider whose previously ran retailers that sold pharmaceutical drugs, books and groceries.

Murphy replaced Chairman Robert Fisher, who had temporarily steered the company after Gap parted ways in January with its previous chief executive, former Walt Disney Co. executive Paul Pressler.

Although Gap’s sales continued to sag, the company’s second-quarter earnings yielded a pleasant surprise. Excluding a tax benefit and expenses incurred in its recent cutbacks, Gap said Thursday that it expects to report earnings of 19 cents or 20 cents per share. The projection topped the average earnings estimate of 13 cents per share among analysts surveyed by Thomson Financial.

Gap’s stock price has plunged by nearly 20 percent so far this year.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com