Target to cut 1,000 corporate jobs in major shake-up before holidays: Reports
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Target is one of downtown Minneapolis' largest employers. Photo: AaronP/Bauer-Griffin/GC Images
Target will lay off around 1,000 corporate employees and close another 800 open roles, multiple outlets reported Thursday.
Why it matters: The move — which eliminates about 8% of the workforce at Target's headquarters — is one of the largest corporate shake-ups in the retail giant's recent history.
- It also signals how incoming CEO Michael Fiddelke, a longtime company insider, plans to reshape operations after a long sales slump.
Driving the news: The cuts will affect mostly headquarters staff, with managers hit harder than individual contributors, according to the Wall Street Journal, the first outlet to report the news.
- Target told employees to work remotely next week as teams are briefed on the changes.
- Affected employees will be paid through Jan. 3 and may receive severance packages.
What they're saying: "The truth is, 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 told employees in a memo reported by CNBC.
The big picture: Target, one of the nation's largest retailers, has been struggling to find its groove on prices and merchandising as shoppers look elsewhere for both, as Axios reported earlier this year.
Flashback: The company's second-quarter earnings report, released in August, showed a decline of 1.9% in comparable sales from a year ago.
- That included a 3.2% drop in comp store sales and a 4.3% increase in comp digital sales.
Between the lines: Target has been losing ground to rival Walmart on value and product mix, GlobalData analyst Neil Saunders said in August
- He cited inventory issues and long register waits as problems hurting customer experience.
The intrigue: The company has also weathered consumer backlash over its Pride Month merchandise and, more recently, its pullback on its diversity, equity and inclusion (DEI) initiatives.
- The shift on DEI, announced shortly after President Trump returned to the White House, sparked boycott calls.
- Foot traffic data shows the retailer's sales have dipped and struggled to rebound since the January boycott launch, per the Minnesota Star Tribune.
Zoom in: The cuts will hit the heart of the Twin Cities' corporate economy, affecting one of the region's largest employers — and the second-largest employer in downtown Minneapolis.
- The announcement comes just weeks after Target's long-awaited return-to-office mandate for much of its corporate workforce, a move downtown boosters hoped would breathe new life into a city center that has struggled to rebound since the pandemic.
What we're hearing: Rumors of impending layoffs have swirled at Target headquarters and online in recent weeks, putting employees on edge.
What's next: The company will announce details — including which employees are affected — on Tuesday, meaning workers will remain in the dark about their fate through the weekend.
- All U.S. corporate headquarters employees have been asked to work remotely that day.
Editor's note: This story has been updated with additional background on Target headquarters and the local economy.