Target to slash 1,800 corporate jobs in bid for turnaround
Target will cut 1,800 corporate jobs, the US retail giant told its employees on Thursday, as the struggling company works to end four years of stagnant sales.
The layoffs, which will be rolled out next week, mark the retailer’s first major workforce reduction in a decade and will reduce its global workforce by around 8%.
“Too many layers and overlaps of work have slowed down decisions, making it more difficult to bring ideas to fruition,” new CEO Michael Fiddelke said in a memo.
Several quarters of weak sales and a plummeting stock price have put Target behind Walmart and other competitors. Shoppers cut back on non-essential spending, while backlash over diversity policies added to Target’s woes.
Mr. Fiddelke, a 20-year veteran of the company, called the layoffs “a necessary step in building Target’s future.” He was named chief executive in August and is expected to succeed Brian Cornell, the company’s current leader, in February.
About 1,000 company employees are set to be laid off and 800 vacant positions will no longer be filled, a Target spokesperson said.
More details are expected to be announced on Tuesday. Mr. Fiddelke asked employees of American companies to work from home next week.
The layoffs will not affect retail employees who work in Target’s nearly 2,000 U.S. stores.
Target is historically known for its affordable clothing and wide range of inexpensive groceries, housewares, electronics and toys.
But non-essential products like clothing and electronics account for about half of the company’s sales, making it vulnerable in recent years as customers have cut back on spending on extras in the face of rising prices and tariff uncertainty.
In addition to macroeconomic headwinds, the retailer’s financial woes have also been linked to company-specific dynamics, including inventory issues and backlash following an earlier decision to end diversity, equity and inclusion (DEI) goals.
Target’s stock price has fallen 30% this year, while Walmart’s has gained nearly 18%.
Target warned in May that sales would be lower than expected this year, due to concerns about how a consumer pullback on discretionary items could affect its business. It kept its guidance steady in August and narrowly beat expectations for quarterly earnings.
When he was named chief executive, Mr Fiddelke said in a statement that the company had “work to do” and needed to move “faster, much faster”. He is committed to improving the quality of the products offered and integrating more technology into the company.
