Additional Coverage:
Target Announces Significant Corporate Layoffs in Bid to Streamline Operations
Minneapolis, MN – Target announced Thursday it will eliminate approximately 1,800 corporate positions, a move the retail giant states is aimed at streamlining decision-making and accelerating efforts to regain its customer base. The layoffs, representing about 8% of Target’s global corporate workforce, will primarily impact employees at its Minneapolis headquarters.
Roughly 1,000 employees are expected to receive layoff notices next week, with an additional 800 vacant positions also being eliminated, according to a company spokesperson.
Chief Operating Officer Michael Fiddelke, who is slated to become Target’s next CEO on February 1st, informed personnel of the downsizing in a note issued Thursday. Fiddelke requested Minneapolis office employees work from home next week, with further details to be provided on Tuesday.
“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, operating approximately 1,980 U.S. stores, has faced increasing competition from Walmart and Amazon in recent years, particularly as inflation has led shoppers to curb discretionary spending. Customers have also voiced concerns regarding store conditions and merchandise selection, which some feel no longer aligns with the retailer’s once-renowned “Tarzhay” aesthetic.
Fiddelke outlined his three urgent priorities upon his August announcement as incoming CEO: re-establishing the company’s leadership in merchandise selection and display, enhancing the customer experience through consistently stocked shelves and clean stores, and investing in technology.
He reiterated these goals in his message to employees, characterizing the layoffs as a “necessary step in building the future of Target and enabling the progress and growth we all want to see.”
“Adjusting our structure is one part of the work ahead of us. It will also require new behaviors and sharper priorities that strengthen our retail leadership in style and design and enable faster execution,” Fiddelke added.
Target has reported flat or declining comparable sales in nine of the past eleven quarters. The company’s second-quarter report in August showed a 1.9% dip in comparable sales and a 21% decrease in net income.
The job cuts will not affect store employees or workers in Target’s sorting, distribution, or other supply chain facilities. Corporate employees impacted by the layoffs will receive pay and benefits until January 8th, in addition to severance packages.