Target said Thursday it’s planning to eliminate about 1,800 corporate positions in an effort to streamline decision-making and accelerate initiatives 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 close about 800 vacant jobs, according to a company spokesperson.
The cuts represent about 8% of Target’s corporate workforce globally, although the majority of the affected employees work at the company’s Minneapolis headquarters, the spokesperson said. The layoffs will not affect any store employees or workers in Target’s sorting, distribution and other supply chain facilities.
Chief Operating Officer Michael Fiddelke, who’s set to become Target’s next CEO on Feb. 1, issued a note to personnel on Thursday announcing the downsizing. He said further details would come on Tuesday, and asked employees at the Minneapolis offices to work from home next week.
“The truth is, the complexity we’ve created over time has been holding us back,” Fiddelke, a 20-year Target veteran, wrote in his note. “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.”
Target, which has nearly 2,000 stores across the U.S., lost ground in recent years to Amazon and Walmart as inflation caused shoppers to curtail their discretionary spending. Customers have complained of messy stores with merchandise that doesn’t reflect the expensive-looking but budget-priced niche that long ago earned the retailer the jokingly posh nickname “Tarzhay.”
Fiddelke said in August when he was announced as Target’s next CEO that he would step into the role with three urgent priorities: reclaiming the company’s position as a leader in selecting and displaying merchandise; improving the customer experience by making sure shelves are consistently stocked and stores are clean; and investing in technology.
He cited the same goals in his message to employees Thursday, calling the layoffs a “necessary step in building the future of Target and enabling the progress and growth we all want to see.”
Target has reported flat or declining comparable sales — those from established physical stores and online channels — in nine out of the past 11 quarters. The company reported in August that comparable sales dipped 1.9% in its second quarter, when its net income also dropped 21%.
