Target Corporation plans to eliminate 1,800 corporate jobs, representing approximately 8 percent of its workforce, as part of a broader effort to streamline operations and drive growth. Executives from the Minneapolis-based retailer announced these cuts amid ongoing challenges, including declining sales and a diminishing reputation as a trendy discount retailer.
The layoffs, which will affect employees at the company’s global headquarters, are part of an initiative to simplify Target’s corporate structure. A spokesperson stated, “We’ve announced changes to our corporate structure today in an effort to accelerate our strategy and return to growth.” The company emphasized that these job cuts were not solely cost-saving measures but crucial adjustments to enhance agility and decision-making within the organization.
Employees impacted by the layoffs will continue to receive pay and benefits until January 3, 2024. Additionally, they will be provided with severance packages and various support services, ensuring a smoother transition.
In a memo distributed to employees, Target’s incoming Chief Executive Officer, Michael Fiddelke, indicated that the company has launched “enterprise acceleration efforts” aimed at simplifying operations. He noted, “The complexity we’ve created over time has been holding us back. Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.” Fiddelke, who takes over from Brian Cornell on February 1, 2024, requested all U.S. corporate employees to work from home for the following week to facilitate these changes.
Fiddelke’s memo highlighted the significance of the decisions impacting the workforce, stating, “Decisions that affect our team are the most significant ones we make, and we never make them lightly.” He acknowledged the difficult nature of these changes while asserting their necessity for Target’s future growth.
The restructuring comes at a time when Target faces scrutiny over its financial performance. Neil Saunders, managing director at GlobalData, commented on the situation, noting that while the layoffs may streamline operations, they also reflect an extended period of underperformance. “The repeated failure to grow the top line in a meaningful way has eroded profitability,” he explained. Saunders suggested that while cutting corporate jobs may enhance profit margins, it does not address the fundamental issues affecting Target’s customer experience.
Fiddelke emphasized that the adjustments to the corporate structure are just one aspect of the broader changes required at Target. He called for new behaviors and sharper priorities to strengthen the company’s leadership in retail, enhance guest experiences, and expedite technology advancements. “Put together, these changes set the course for our company to be stronger, faster, and better positioned to serve guests and communities for many years to come,” he concluded.
As Target embarks on this significant restructuring, the industry watches closely to see how these changes will impact not only the company’s operations but also its long-term viability in a competitive retail landscape.
