Target Corporation announced it will cut 1,800 corporate jobs as part of a turnaround strategy to address four years of stagnant sales. The layoffs, which mark the retailer’s first major downsizing in a decade, were communicated to employees on Thursday and are set to be implemented next week.
The job reductions will affect approximately 8% of Target’s global corporate workforce, with about 1,000 employees being laid off and 800 vacant positions eliminated. Incoming Chief Executive Michael Fiddelke described the move as a necessary step to streamline operations and accelerate decision-making. He cited “too many layers and overlapping work” as factors that have hindered the company’s ability to innovate and respond to market changes. This restructuring aims to create a more agile organization capable of driving future growth.
Target’s financial performance has been lagging behind competitors like Walmart, with several quarters of weak sales contributing to a 30% drop in its stock price this year. The retailer has struggled as consumers reduce spending on non-essential items such as clothing and electronics, which account for about half of its revenue. Additionally, the company faced backlash over its diversity, equity, and inclusion policies, further complicating its recovery efforts. These challenges have compounded over time, eroding investor confidence.
The layoffs are part of a broader effort to revitalize the business under Fiddelke’s leadership. He, a 20-year veteran of the company, was named CEO in August and is scheduled to take over from current leader Brian Cornell in February. In a memo to staff, Fiddelke emphasized the need for Target to move “faster, much faster” and pledged to enhance product quality and integrate more technology into operations. His appointment signals a shift towards more decisive action to address longstanding issues.
Employees at Target’s corporate offices were asked to work from home during the week of October 27 to facilitate the transition and announcements. The job cuts will not impact retail staff at the company’s nearly 2,000 stores across the United States, ensuring that customer-facing operations remain unaffected. This approach minimizes disruption to daily store activities while allowing corporate teams to manage the changes privately.
Target’s challenges are rooted in both macroeconomic factors and company-specific issues. Rising prices and uncertainty about tariffs have led shoppers to prioritize essential purchases over discretionary items. Internally, inventory management problems and the reversal of DEI targets have also played a role in the company’s struggles. These elements have created a perfect storm, forcing Target to reassess its operational model and cost structure.
Looking ahead, Target plans to provide more details on the restructuring on Tuesday. Fiddelke’s strategy includes focusing on core strengths while addressing inefficiencies that have accumulated over years of growth. The company aims to regain its competitive edge in the retail sector by simplifying its corporate structure and reinvesting in areas that drive customer loyalty. This could involve enhancing digital capabilities and refining product assortments.
This restructuring comes at a critical time for Target, as it seeks to reverse a prolonged period of underperformance. Industry analysts will be watching closely to see if these measures can stem the decline and position the retailer for a sustainable recovery in the evolving retail landscape. The success of this initiative will depend on execution and the company’s ability to adapt to consumer trends in a highly competitive market.