Target plans to cut 1,800 corporate jobs to focus on restructuring and rebuilding its brand.
Target Corporation announced on Thursday its decision to eliminate approximately 1,800 corporate positions as part of a strategic effort to streamline its decision-making processes and rekindle interest in the brand’s customer base. This move follows recent challenges the retailer has faced in a competitive marketplace, particularly against industry giants like Amazon and Walmart.
According to a spokesperson, around 1,000 employees are anticipated to receive layoff notifications in the coming week, alongside plans to close roughly 800 vacant positions within the corporate structure. These job cuts constitute about 8% of Target’s global corporate workforce, predominantly impacting employees at the company’s Minneapolis headquarters. Notably, the layoffs will not extend to store employees or staff members at Target’s sorting, distribution, and other supply chain facilities.
Michael Fiddelke, the Chief Operating Officer who is slated to become Target’s next CEO on February 1, shared the decision with staff through a memo. He addressed the complexity that has characterized the company’s operations, indicating that overlapping responsibilities have hindered swift decision-making and innovation. Employees in Minneapolis have been advised to work remotely in the upcoming week while the company navigates these transitions.
The reductions come amidst heightened scrutiny of Target’s performance, particularly as consumers have shifted their spending habits due to inflation and other economic pressures. Over recent years, the company has struggled to maintain its footing in a retail environment that has changed dramatically. Customers have voiced dissatisfaction with the state of stores and product displays, noting that the shopping experience no longer aligns with the retailer’s once-popular image.
Fiddelke’s ascension to the CEO position is accompanied by a commitment to prioritize essential aspects of the business: enhancing merchandise selection and presentation, improving customer experiences by ensuring well-stocked and orderly stores, and significant investment in technology. During the announcement of his upcoming role last August, Fiddelke emphasized these areas as urgent objectives to reclaim Target’s stature in the retail sector.
In recent reports, Target disclosed flat or declining comparable sales figures in nine out of the past eleven quarters. The company’s most recent earnings report for the second quarter noted a 1.9% decrease in comparable sales, coinciding with a significant 21% decline in net income. The planned layoffs and strategic shifts aim to align with Target’s vision for future growth and profitability.
As the retailer navigates this critical juncture, the hope is that these measures will pave the way for recovery and reinvigoration in an increasingly competitive market.
