A big shake-up at Target headquarters
Target is cutting its deepest jobs in a decade as it struggles to get back on track after years of weak sales. The Minneapolis retailer announced Thursday that it’s eliminating about 1,800 corporate positions—around 8% of its headquarters staff—as part of a restructuring effort to speed up decision-making and boost efficiency.
The layoffs include around 1,000 current employees who will be let go and another 800 positions that will remain unfilled, according to an internal memo from Target’s incoming CEO, Michael Fiddelke. Employees affected by the cuts will be notified next Tuesday.
“This is a difficult step, but a necessary one,” Fiddelke wrote. “The complexity we’ve created over time has been holding us back.”
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Leadership transition comes at a challenging time
The job cuts come as Target is also seeing a transition in leadership. Fiddelke, who has served as the company’s chief operating officer and previously as its chief financial officer, is set to replace long-time CEO Brian Cornell on Feb. 1.
Fiddelke has been leading the Enterprise Acceleration Office since May, a company-wide effort to streamline operations, become more efficient, and make better use of technology. Thursday’s announcement appears to be one of the first major moves under that initiative.
He said in the memo that the layoffs are “about building the future of Target and enabling the progress and growth we all want to see.”
Struggling to regain growth
Target’s move comes after a challenging several years of declining sales and changing consumer habits. Following years of pandemic-era growth, the retailer has struggled with softer store traffic, inventory bloat, and customer outrage over product controversies.
Target anticipates total annual sales to decrease again this year, continuing a four-year period of stagnation. The company’s stock has fallen by approximately 65% since its peak in late 2021.
Analysts also point out the retailer’s sales mix exposes it to more economic risk than competitors. About half of Target’s sales come from discretionary spending such as clothing, electronics, and home goods—sectors that shoppers will sacrifice during lean times. Walmart, by contrast, derives only about 40% of sales from those sectors, with more dependence on groceries and essentials that are less vulnerable to economic ups and downs.
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Falling behind competitors
Target’s woes have brought about a sharp comparison with its main competitors. While Walmart’s stock has soared about 123% in the past half-decade, Target’s stock has fallen 41% during the same period.
GlobalData Retail noted that Target’s higher focus on discretionary items as well as its supply chain issues, have made the company vulnerable to changing consumer spending patterns.
As economic pressures worsen, consumers have been focusing on needs over discretionary spending, which hurts Target’s bottom line.
Support for affected employees
Despite the size of the cuts, Target said the job reductions will not affect store or supply chain employees. The company went out of its way to mention the cuts are limited to corporate roles, mostly at its Minneapolis headquarters.
A representative stated that the affected workers will receive pay and benefits through Jan. 3, along with severance packages to help ease their transition.
Fiddelke acknowledged the human cost of the layoffs but said the company needs to act quickly to stay ahead. “Too many layers and duplication of work have slowed decision-making, making it harder to get ideas into market,” he wrote. “These changes are required if we’re going to move faster and be stronger.”
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Looking ahead
With a new CEO and a pared-down corporate structure, Target is hoping to refocus its efforts on innovation, technology, and the customer experience. The retailer says the goal is not simply to cut costs but to position itself for a return to growth after years of stagnation.
Whether such painful transformations will enable Target to regain its footing is yet to be seen—but one thing is certain: America’s iconic big-box retailer is ushering in a new era, one that requires speed, simplicity, and clearer focus to reclaim shoppers.
