Target announced on Thursday its intention to cut approximately 1,800 corporate jobs as part of a strategy to enhance decision-making processes and boost efforts to regain its dwindling customer base in the discount retail sector.
According to a company spokesperson, around 1,000 employees will receive layoff notifications next week, while the company also aims to eliminate about 800 open positions.
This reduction accounts for about 8% of Target’s global corporate staff, with most of the impacted employees based at its Minneapolis headquarters. The layoffs will not affect store personnel or employees in the sorting, distribution, and other supply chain areas.
Michael Fiddelke, the Chief Operating Officer slated to take over as Target’s CEO on February 1, informed staff of the impending cuts in a memo on Thursday. He also mentioned that more information would be provided on Tuesday and advised Minneapolis office employees to work remotely next week.
In his communication, Fiddelke, who has been with Target for 20 years, stated, “The complexity we’ve accumulated over time has been an obstacle. Too many layers and redundant tasks have delayed decisions, making it difficult to bring ideas to fruition.”
With nearly 2,000 stores across the United States, Target has struggled to compete with the likes of Amazon and Walmart, especially as inflation has led consumers to reduce discretionary spending. Customers have voiced concerns about disorganized stores and merchandise that fails to match the retailer’s traditionally chic yet budget-friendly image, which humorously earned it the 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%.
