Gap Inc. plans to furlough 80,000 employees in the United States and Canada as most of its stores remain temporarily closed due to the coronavirus pandemic, according to a report by financial services news company Benzinga.
All Gap locations were shuttered on March 19.
»COMPLETE COVERAGE: CORONAVIRUS
With revenue losses mounting and the spread of the virus accelerating, executives for the popular clothing retailer conceded that the timeline for reopening was “further off” than initially hoped.
The company had continued to pay its workers after closing stores nearly two weeks ago, but now that will end, Benzinga reports.
Sonia Syngal, who became Gap's new CEO on March 23, and Bob Fisher, Chair of Gap Inc.’s Board of Directors, announced in a corporate blog post the “painful decision” to furlough the majority of store employees without pay.
They said, however, that employee benefits will continue until stores reopen and that the executive board and entire leadership team would be taking pay cuts to help the company weather the crisis.
As with many other retailers, the pandemic has devastated Gap as consumers shift to purchases of immediate necessities instead of clothing, Benzinga reported, citing Fortune magazine.
Gap’s retail rival Macy’s Inc. has announced it will continue furloughing a majority of its employees through May due to continued sales decline amid the pandemic.
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On March 17, Macy's joined industry hotel and food leaders by closing its doors to slow down the spread of coronavirus.
The company had already been facing several store closures and slowing sales prior to the pandemic.
On Monday, Macy's executives told the staff of nearly 130,000 employees most would continue to be furloughed at least through May, according to the Wall Street Journal.
However, those who qualify for health benefits, would still receive that coverage as the company deals with the economic implications of the COVID-19 crisis.
“During this closure, we will continue to serve our customers through our e-commerce sites.”
On Monday, JC Penney also announced it would furlough most of its 90,000 hourly employees beginning April 2 as its stores remained closed during the outbreak. Kohl’s is furloughing 85,000, according to CNBC.
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