Target said Thursday that it is eliminating about 1,800 corporate positions in an effort to streamline decision-making and accelerate efforts to rebuild the discount retailer’s customer base.
About 1,000 employees are expected to receive layoff notices next week, and the company also plans to eliminate about 800 vacant positions, a company spokesman said. The cuts represent about 8% of Target’s global corporate workforce, although most of the affected employees work at the company’s headquarters in Minneapolis, the spokesperson said.
Chief Operating Officer Michael Fiddelke, who will become Target’s next CEO on Feb. 1, issued a memo to staff Thursday announcing the reduction. He said they would receive more details on Tuesday and asked employees in the Minneapolis offices to work from home next week.
“The truth is that the complexity we have 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 down decisions, making it harder to bring ideas to life.”
Target, which has about 1,980 stores in the United States, lost ground to Walmart and Amazon in recent years as inflation caused shoppers to reduce their discretionary spending. Customers have complained about cluttered stores with merchandise that doesn’t reflect the expensive-but-affordable-looking niche that long ago earned the retailer the humorous and stylish nickname “Tarzhay.”
Fiddelke said in August, when he was announced as Target’s next CEO, that he would take over with three urgent priorities: regain the company’s position as a leader in merchandise selection and display; improve customer experience by ensuring shelves are constantly stocked and stores are clean; and invest in technology.
He cited the same goals in his message to employees, calling the layoffs a “necessary step to build Target’s future and enable the progress and growth we all want to see.”
“Adjusting our structure is one part of the work ahead. It will also require new behaviors and clearer priorities that strengthen our retail leadership in style and design and enable faster execution,” he wrote.
Target has reported stable or declining comparable sales (those from established brick-and-mortar stores and online channels) in nine of the last 11 quarters. The company reported in August that comparable sales fell 1.9% in its second quarter, when its net income also fell 21%.
The job cuts will not affect any store employees or workers at Target’s sorting, distribution and other supply chain facilities, the company spokesperson said.