Oct. 24 (UPI) — Target is eliminating 1,800 corporate jobs as the retailer attempts to return to growth after years of flat sales, the first major round of layoffs in a decade, the company announced Thursday.
The job cuts are a combination of 1,000 employee layoffs and another 800 positions that the Minneapolis-based retailer said will not be filled. Together, the reductions comprise about 8% of Target’s corporate workforce. Effected employees will be notified Tuesday, the company said.
In a Thursday memo, Target’s incoming CEO, Michael Fiddelke, cited a need to make urgent changes as the reason for the layoffs. “The truth is, the complexity we’ve created over time has been holding us back,” he explained. “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.”
Fiddelke has been looking for ways to simplify company operations since May by employing technology and other methods to accelerate Target’s growth.
In the Thursday memo, he called the cuts difficult to make, but a “necessary step in building the future of Target and enabling the progress and growth we all want to see.”
The job cuts come amid slumping sales for Target, which the company projects will continue this year. The retailer is also trying to recover from declining in-store traffic as competition from online retailers has increased, inventory problems and customer backlash over social issues. Target’s share prices have dropped 63% since a high in 2021.
By comparison, Walmart shares are up 123% over the same time period.
About half of Target’s sales come from discretionary spending, more than other retailers such as Walmart, and less from grocery sales, which can leave Target vulnerable to economic uncertainty and consumer behavior.
