Gap stock slips on plans to layoff hundreds of corporate workers

Yahoo Finance Live discusses a drop in Gap stock as the company reportedly plans to layoff hundreds of corporate workers.

Video Transcript

- We'll kick it off with Gap. Now, the retailer reportedly planning to lay off hundreds of more jobs, looking at losses of just about 6% right now. The cuts, first reported by the Wall Street Journal, come as the company struggles to regain momentum. Shares are down nearly 25% in the past year. When you take a look at the size of these cuts, there are expected to exceed the 500 positions that were eliminated last fall. Now remember, this retailer still does not have a permanent CEO. The thought, though, on the street by some analysts out there, is that this might be the final cost-cutting effort before a new chief executive is announced.

And we talk a lot, just about consumers pulling back on spending. Gap hasn't been able to really regain its momentum. The jury is out as to whether or not new leadership is going to be able to right this ship.

DIANE KING HALL: Right, right. I know. I mean, it's been a tough climate for Gap. They've been really struggling for years, honestly, and they've had an identity crisis for years. You'll recall several years ago, they tried to spin off, or they talked about spinning off, Old Navy, which is really its anchor and has done the best for the company. So it's clear, like you said, that their search for a new CEO is they're trying to kind of close ranks as they figure that piece of the puzzle out.

- The CEO search has gone on too long though. This is since July.

DIANE KING HALL: Almost a year.

- And what you're hearing about inside is there's kind of been a game of "Survivor" to just hang on to your job. And they've clearly mis-executed. The inventory has been a mess. They had the breakup with Kanye West. But don't you worry, they've got a partnership with Barbie. It starts May 23. The Gap stores globally-- Are you laughing at me?

- That'd be the game-changer.

- I'm being serious here!

- If that is their rescue plan, I'm a little nervous.

- I was being serious and you are laughing at me. The Gap and the Barbie collaboration with Mattel starts May 23. They'll also have a Hot Wheels spin-off. I am not joking about the Barbie aspect of this. Watch that thing sell like crazy, my friends.

DIANE KING HALL: I don't know if that's going to work.

- You are the biggest proponent of this Barbie movie, everything related to the Barbie movie. I don't know. Maybe I'll be wrong.