Target announced that it will eliminate 1,800 corporate positions, which constitutes approximately 8% of its global corporate workforce. This decision is intended to address four years of stagnant sales. The layoffs are scheduled to begin next week and represent the company’s most significant downsizing in the past decade. Michael Fiddelke, the incoming CEO, noted in a memo that too many layers and overlapping roles have hindered decision-making.
The announcement comes amid several quarters of declining sales and a drop in stock prices, which have placed Target behind competitors such as Walmart. Economic factors, including a decrease in non-essential spending by consumers and controversy around the company’s diversity policies, have also contributed to its challenges.
Fiddelke, who has worked at Target for 20 years and is set to officially take over as CEO in February, described the job cuts as essential for Target’s future. Of the layoffs, about 1,000 corporate employees will lose their jobs, while 800 open positions will not be filled. Further details regarding the layoffs will be shared on Tuesday, and Fiddelke has requested that corporate employees work from home during that time. Importantly, these layoffs will not impact retail employees across Target’s nearly 2,000 locations in the U.S.
Historically, Target has been recognized for its range of affordable products, including clothing, groceries, home goods, electronics, and toys. However, with non-essential items representing roughly half of its sales, the company has been particularly vulnerable to shifts in consumer spending amid rising prices. In addition to broader economic challenges, Target has faced specific difficulties, such as inventory management and the backlash related to its diversity, equity, and inclusion initiatives. The company’s stock has decreased by 30% this year, contrasting with an 18% increase in Walmart’s stock. In May, Target had warned of lower-than-expected sales for the year, reflective of these ongoing consumer trends.
Source: https://www.bbc.com/news/articles/ce8g2rxpwd7o?at_medium=RSS&at_campaign=rss