Target is Eliminating 1,800 Corporate Jobs as It Looks to Reclaim Its Lost Luster
Target said Thursday it will eliminate about 1,800 corporate positions in an effort to streamline decision-making and accelerate attempts to rebuild the flagging discount retailer’s customer base.
About 1,000 employees are expected to receive layoff notices next week, and the company also plans to eliminate about 800 vacant jobs, a company spokesman said. The cuts represent about 8% of Target’s worldwide corporate workforce, but the majority of affected employees work at the company’s Minneapolis headquarters, the spokesperson said.
Chief Operating Officer Michael Fiddelke, who will become Target’s next CEO on Feb. 1, issued a memo to staff on Thursday announcing the downsizing. He said more details would come Tuesday and asked employees in his Minneapolis offices to work from home next week.
“The truth is that the complexity we create over time is holding us back,” Fiddelke, a 20-year Target veteran, wrote in his memo. “Too many layers and overlapping work slowed down decisions and made it difficult to implement ideas.”
Target, which has about 1,980 stores in the U.S., has lost ground to Walmart and Amazon in recent years as inflation caused shoppers to cut back on discretionary spending. Customers long ago complained about cluttered stores with expensive-looking products that didn’t reflect the affordable niche that earned the retailer the jokingly flamboyant nickname “Tarzhay.”
When Fiddelke was announced as Target’s next CEO in August, he said he would step into the role with three immediate priorities: restoring the company’s position as a leader in product selection and display; improving customer experience by ensuring shelves are constantly stocked and stores are clean; and we invest in technology.
He expressed the same goals in his message to employees, calling the layoffs “a necessary step to build Target’s future and deliver the progress and growth we all want to see.”
“Adjusting our structure is part of the work ahead. This will also require new behaviors and sharper priorities that will strengthen our retail leadership in style and design and enable faster execution,” he wrote.
Target has reported flat or declining comparable sales from established brick-and-mortar stores and online channels in nine of the last 11 quarters. The company reported in August that comparable sales fell 1.9% in the second quarter, while net income fell 21%.
The layoffs will not affect any store employees or employees at Target’s sorting, distribution and other supply chain facilities, a company spokesman said.
The spokesperson said that company employees who lose their jobs will receive severance packages as well as salaries and benefits until January 8.
