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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.