This is known as masking. The top "image" is the mask, it cuts out (removes) everything that's not included in itself. So think of the letter as a "me, and me only" shape, that cuts out the object below it.
Masking is done slightly differently in all the bitmap apps. Gimp's got some great tutorials on youtube. But I see your problem, you probably didn't even know to search for "masking".
Layers are the name generally given to the objects stacked upon one another, sometimes even masks are called "layers", but only act as masks. Sometimes masks are their own thing. Different ways of achieving the same or similar goals.
Here's a video that will run you though exactly how to achieve what you want in Gimp:
btw, there's also a shadow being applied, to lift the K off the background a little.
This is about the same problem as [this recent question]( Trying to get pattern into specific shape - GIMP) but with letters, so:
- Load the image
- Add an alpha channel if necessary: Layer>Transparency>Add alpha channel
- Create the letter with the text tool
- On the text layer: Layer>Transparency>Alpha to selection
- Hide the text layer
- On the image layer: Layer>Mask>Add layer mask and tick the Selection box
Of course save the image in a format that supports transparency (PNG).