Gap to Trim HQ Staff

Gap Inc. (San Francisco) announced it would abandon its original plans to boost headquarters staffing levels this year. Rather, the retail organization suffering from a sales and income slump will reduce staffing levels by 5 to 7 percent. This is expected to affect 500 to 700 employees and result in a second-quarter pretax charge of $10 to $20 million.

Gap also said it expects its annual square footage growth in 2002 and 2003 to drop to about 10 percent. Its previous expectations were 15 percent a year. But the company said it remains committed to long-term annual earnings growth of at least 15 percent, achieved by focusing more on same-store sales growth, margin improvement and cost management.

“We're committed to quality long-term earnings growth,” said president and ceo Millard Drexler, “with a greater focus on store profitability, while continuing to invest in markets that offer attractive growth opportunities.”