Target has announced plans to eliminate 1,800 corporate jobs as part of a strategy to simplify operations and address declining sales amid increased competition.
Retail giant Target is facing significant challenges as it announced on Thursday that it will cut 1,800 corporate jobs. This decision, revealed by incoming CEO Michael Fiddelke, aims to reignite growth after nearly four years of stagnant sales.
The layoffs will affect approximately 1,000 current employees and involve the closure of 800 vacant positions, representing about 8% of the company’s global corporate workforce. This restructuring is part of a broader strategy to simplify operations, accelerate growth, and tackle ongoing issues such as declining sales, inventory challenges, and heightened competition from rivals like Walmart and Amazon.
In a memo sent to employees at Target’s headquarters, Fiddelke emphasized the need for urgent changes, stating, “The truth is, the complexity we’ve created over time has been holding us back. Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.”
According to a company spokesman, affected employees will receive pay and benefits until January 3, 2026, along with severance packages. The layoffs will focus solely on corporate positions, leaving store-level employees and supply chain staff unaffected. Target has assured that this restructuring is intended to reduce organizational complexity, eliminate overlapping responsibilities, and enhance decision-making and innovation.
This announcement comes on the heels of 11 consecutive quarters of weak or declining comparable sales. The slowdown has been attributed to soft demand for discretionary goods, including apparel and electronics. Despite these challenges, the company has maintained its annual forecasts after previously issuing a downgrade in May.
Following the news of the layoffs, Target’s stock saw a modest increase, reflecting investor optimism that the operational streamlining will help the company regain efficiency, competitiveness, and long-term profitability.
This development underscores the increasing pressure on major retailers to adapt swiftly to changing consumer behavior, economic uncertainty, and global market competition. It highlights the role of corporate restructuring as a vital tool for sustaining business performance in a challenging retail landscape.
Moreover, this move illustrates the broader challenges within the retail industry, such as weak demand for discretionary items, evolving consumer preferences, and intensified competition from rivals like Walmart and Amazon. Maintaining annual forecasts despite consecutive quarters of weak sales indicates that Target is striving to balance operational restructuring with ongoing business performance, aiming to reassure investors and the market about its long-term prospects.
Source: Original article