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October 29, 2025
Will Rationalizing its Corporate Workforce Quicken Target’s Recovery?
Target confirmed it is eliminating about 1,800 positions, or about 8% of its corporate workforce, in an effort to streamline decision-making and accelerate initiatives under its turnaround plan.
Affected employees were notified Oct. 28, and will continue to receive pay and benefits until Jan. 3, as well as severance packages, the Wall Street Journal reported.
COO Michael Fiddelke, who is set to become Target’s next CEO on Feb. 1, in an internal memo last Thursday noted that the job reductions are the first step in a restructuring process — one Target hopes will strengthen its management and accelerate the use of new technology.
“The truth is, the complexity we’ve created over time has been holding us back,” said Fiddelke. “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.”
Target’s Fiddelke Refers to Layoffs as Necessary Step in Restructuring Effort
Fiddelke said in August, when he was announced as Target’s next CEO, that he would step into the role with three urgent priorities: reestablishing its merchandising authority, elevating the guest experience with a focus on consistency, and fully leveraging technology to move faster. He cited the same goals in his message to employees, calling the layoffs a “necessary step in building the future of Target and enabling the progress and growth we all want to see.”
Fiddelke’s memo released last Thursday went on to say: “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 so we can lead with merchandising authority, elevate the guest experience with every interaction, and accelerate technology to enable our team and delight our guests.”
“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,” concluded Fiddelke.
About 1,000 employees are expected to receive layoff notices while about 800 open jobs won’t be filled. The cuts will impact managers more than individual contributors, and do not affect store or supply chain roles.
“It’s important to understand that we did not take these actions to save cost,” a Target spokesperson told The New York Times. He added that adjusting the global corporate structure “is the first step in rewiring our organization to be agile and make faster decisions.”
Target has reported 11 straight quarters of flat or declining sales and seven straight quarters of foot traffic declines, due in part due to softer demand for many of its discretionary fashion and home goods items in recent years amid inflationary pressures. Target’s reputation has also taken a hit with both conservatives and liberals over the mishandling of DEI initiatives.
An anonymous corporate Target employee, who works out of the company’s headquarters, told Business Insider that after Fiddelke sent the memo, the atmosphere internally was one of “total panic.”
“We’re all trying to figure out if we’re essential team that’s going to be kept,” the employee told the outlet.
Discussion Questions
How confident are you that Target’s move to reduce its corporate workforce is about speeding up business decision-making rather than strictly cost-cutting?
Are mass layoffs generally a motivator or a morale crusher for corporate staff?
Poll
Loading …BrainTrust
Gwen Morrison
Partner, Candezent & Retail Cities Consultant
Dick Seesel
Principal, Retailing In Focus LLC
Neil Saunders
Managing Director, GlobalData
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Target says the layoffs are meant to streamline decision-making. There’s a dash of truth in this, but it largely serves as cover for the fact that rationalization is needed to protect a bottom line under severe strain. And that strain doesn’t come from the general corporate workforce; it comes from poor leadership. This has caused multiple issues. Among them is a lack of investment in stores, many of which suffer from inadequate staffing that leads to a poor customer experience. This is exacerbated by weak buying processes that fuel out-of-stocks, a half-baked strategy for the grocery and essentials business, an e-commerce model built on the fragile foundation of using store labor, and a poor response to inflationary pressures. Precisely none of these problems will be solved by simply laying off corporate staff.
I’m reasonably confident that Target Corporation’s decision to cut roughly 8 % of its corporate workforce is intended to accelerate decision-making and simplify the organization rather than purely cost-cutting. The incoming CEO, Michael Fiddelke, explicitly cited “too many layers and overlapping work” as an obstacle to innovation and speed. That said, the timing—amid several quarters of weak sales, margin pressure, and investor disappointment—suggests the cost dimension is also very real. Cuts in a retail environment often have dual rationales: to streamline for agility and remove cost burdens. In Target’s case, I believe the agility rationale is genuine, but cost-discipline is inseparable from the strategy.
On the question of mass layoffs and their impact on morale: generally speaking, large-scale reductions tend to be more of a morale crusher than a motivator unless handled with extreme care. The remaining staff may react with uncertainty, distrust, or “what’s next?” anxiety, which undermines performance and innovation. If the message is solely “we had to cut” rather than “we’re refocusing together,” then what might have been intended as a fresh start becomes a stamina drain. Effective leadership communicates a clear new purpose, supports the transition of those leaving, and actively engages those remaining so the move can spark real behavioral change rather than just fear. In short: yes, layoffs can accelerate change — but only when the human side of the change is managed deliberately.
It seems headlines are littered with news about massive staff layoffs lately. This is hardly a retail issue or a Target issue. And while my heart goes out to any person who loses their job, it is reasonable for any company to review roles, teams, and make adjustments, which includes letting people go. Making these changes at Target in conjunction with a changing of the leader is probably the best way to manage it – new leader, new priorities lead to change. Whether this workforce reduction achieves the stated objectives, we’ll never for sure. But we will be watching Target’s results, and there’s no hiding from the quarterly earnings calls. Of course, mass layoffs are never a happy occurrence – people lost their jobs, this is sad! – and it almost always creates some ongoing and negative taint for the brand and the employees who remain. However, it’s also a fact of business life…and with the AI is being touted as the reason for mass layoff is tech, I’m sure that we will continue to see headlines like this.
“Whether this workforce reduction achieves the stated objectives,”
If there are overlap/redundancies of positions… why haven’t they been tracked on a regular basis? (who at the top takes responsibility for the delay?)
In a non M&A situation, I get wary of large # of layoffs at once. Wondering if the work responsibilities being thrown away, aren’t actually some of the staff who could inspire/train/mentor change… given the authority to do so.
In short, before the layoff, has corporate really mapped the roles (including changes in turnaround direction) to the future plan.
Corporate assumptions, in general, run towards ‘big numbers’ to impress investors. But if those big number layoffs harm CX (and sales)???
What Neil said.
What’s baffling is that the top brass at Target doesn’t want to accept responsibility for its problems, and prefers to make up fanciful “reasons.” They really should talk to customers who abandoned Target in droves, and get the answers from them.
And Brian Cornell has been rewarded with a new plum position while others have lost their jobs. Whatever way you cut it, that is not a good look.
Will anybody in the discussion bring up their disastrous DEI abandonment & compare/contrast to Costco? Great way to p— off the upper right quadrant of their base.
Yes, frustrating out-of-stocks; yes, too much Magnolia and not enough mid-century; but the private-label grocery is headed in the right direction, the meat department is satisfactory, and the clothing covers most of the needs of my college student daughter. So listen hard to the communities they forsook and ignore the activist investors / stock pushers / MAGA influencers…
“ignore the activist investors”
That is not going well in past few years, and across sectors.
There is a case to be made for public companies to have 2 public earnings reports/year… vs 4. The other 2 being internal, as measures of course correct.
What makes me skeptical that this is anything more than an earnings boost is that the new Target CEO has been there for over 20 years. Given his background as CFO and in Human Resources, you might say that he was “present at the creation.” If Target is really guilty of a moribund culture — which may be true — what took Mr. Fiddelke, the second in command, so long to address it?
This strikes me as a move to satisfy investors as it’s highly public. I agree with Neil and Kathy’s points. Target needs to get back to it’s core pillars of success from the past while navigating today’s landscape.
Layoffs often help the bottom line but rarely help the top one. The number of companies that have grown their revenues by reducing headcounts? I think it’s zero. Why didn’t the company announce investment strategies at the same time as the staff cuts? Not a good way for a new CEO to get started. McMillon at Walmart did it right, Brian Cornel too. Fiddelke has not.
Who’s kidding who here? Layoffs are 100% about reducing payroll costs.
The idea that you have “too many employees” for good decision making can only be true if you set up a poor process in the first place, The Target symbol is starting to more resemble water circling a drain.
My 1st thought is usually… what roles & goals are those mass # employees bringing to life that may not happen any more?
Were they all bad processes? Could they have USED that human power to change course?
This is “business as usual.” As processes, efficiencies, technology, etc., change, a company’s business model has to change. That may mean changing management structure, developing new hiring processes, laying off employees, and more. This type of conversation could happen in any company and since the beginning of (business) time. Sometimes companies are in growth mode, but they must always be in “ready-to-change” mode. I hope this works for Target.
Mass layoffs are generally scary for employees. Target has offered a generous two-month package. It’s never easy, but that will give people a head start in finding their next opportunity.
We’ll see if any of the 1800 layoffs were actually helping the company, and now their voice/management is gone. 1800 people had no positive effect on CX?? Wouldn’t these people have been the connectors of the grand strategy to the store level plans?
Was only thing standing in the way to Target’s turnaround too many mid level people?
Or do they now hire (instead of train) new people to accomplish the end goal?
Target’s workforce reduction exemplifies a classic strategic folly: treating an external brand-relevance problem as an internal bureaucracy problem. Fiddelke’s stated priorities are “reestablishing merchandising authority,” “elevating the guest experience,” and “leveraging technology.” These are talent-intensive activities requiring experienced buyers, merchants, experience designers, and technologists. Cutting 1,800 corporate positions doesn’t advance any of these goals—it undermines them.
This is denominator management: When you can’t grow revenue, you cut costs to improve the ratio and create the illusion of progress while the fundamental business deteriorates. Real organizational streamlining requires surgical precision, not a meat cleaver. If bureaucratic layers truly slow down decision-making, the solution is redesigning decision rights, not mass layoffs.
You cannot fix market-facing challenges by eliminating internal resources needed to solve them. It’s organizational cognitive dissonance—and Wall Street may applaud the short-term margin improvement while long-term customer relevance continues to erode.
Yes, these “layoffs” will (hopefully) help reset BOTH decision making AND execution. A wake-up call was needed and this definitely has everyone’s attention. In prior conversations about Target I’ve said that I walk through the store and I don’t see CEO problems, I see planner, designer, buyer, merchandise manager, marketing, supply chain and store ops problems. And not in every department. Some look great, some don’t. So hopefully some of this staff reduction is focused on performance issues. It just is less painful for everybody to throw it into a “layoff” bucket.
If he has been taking notes for the last year, Mr. Fiddelke has been in the perfect spot to observe underperforming areas of the business. Yes, it’s a question of why it takes a change at the CEO level to fix the specific problems layers below. But hopefully that’s what is in motion. If this round of layoffs has been driven by the accountants, Target could be in worse shape. If it’s driven in a more informed manner, then real improvement could emerge down the line. Wishing Target the best.
It’s a rough week for retail layoffs, which normally take place after the holidays. Mass layoffs crush morale for corporate staff who are let go and for the survivors. The job market is tight due to hiring freezes, and those who remain will face new pressure to do more to protect their positions.
Target’s decision to eliminate 8% of its corporate workforce clearly signals a commitment to decisive change and organizational agility under the incoming CEO. The stated intent to remove “complexity” and accelerate decision-making is necessary given the 11 quarters of flat or declining sales the retailer has reported. However, the narrative seems to focus more on internal structure than the core drivers of the slowdown, namely merchandise relevance and soft discretionary consumer demand. If layering was the primary impediment, a complete hierarchical revision or a focused hiring freeze could achieve efficiency without mass departures. Furthermore, this move risks unintentionally removing critical talent and institutional knowledge needed to execute the planned improvements in technology and design. Layoffs of this scale can also trigger acute “survivor sickness,” potentially eroding the internal trust and morale required for a major turnaround effort. While the new structure may yield short-term financial gains, the actual recovery depends on external factors and execution quality. The challenge is ensuring the remaining, often overburdened, teams can innovate on merchandising while maintaining service standards. Given the critical need to improve style and design, how will Target ensure that these corporate cuts do not unintentionally sacrifice the specific creative talent necessary to restore its crucial “affordable chic” brand identity?
Hubert Joly is truly a gem in modern leadership, known for saving Best Buy by shifting its focus from a failing cost-cutting model to a people-first purpose. He championed the philosophy of “unleashing human magic,” recognizing that empowering and connecting frontline employees is the ultimate source of innovation and competitive advantage. This human-centric approach allowed him to successfully navigate the “Amazon threat,” proving that deep human connection is a crucial differentiator technology cannot replicate. His legacy underscores that profit is a result, not the purpose, when leaders prioritize service and create an environment where every employee can thrive.
Target needs to get back to the core of delivering value to consumers especially given the inflation pressures. Thinning corporate staff is a short term boost to earnings but they need to give consumers reason to shop there in the first place.