Gap is to cut up to 90 jobs in its London-based European division, mostly from its kidswear department, following a US head office cost-cutting directive.
Technical kidswear roles will be the hardest hit by the cull, after plans to share design responsibility for the department between the European and US teams proved inefficient.
Gap's European president Stephen Sunnucks has spent the past 18 months developing a London-based design team to cater for local shoppers' more fashion-forward taste in clothing, as part of his turnaround strategy for the retail group's European arm. But UK shoppers proved happy to pick up children's clothing designed in the US, negating the need for a localised design team.
The adult design team will remain intact and plans to launch its first full collection for autumn 07, according to a Gap spokeswoman.
"We are committed to the localisation plan and have the full support of the board. Gap Inc continues to believe Europe is its greatest growth market," she said.
Gap Inc interim president and chief executive officer Bob Fisher warned of job cuts in his first-quarter update to the New York Stock Exchange on May 24, as he reported a 26% slide in group net profits to US$178 million (£89.3m).
"We are actively working to fix our core business, retain and recruit talent and streamline operations so that our business can be more nimble and efficient," he said.
Gap has 7,500 employees in Europe.