Target is implementing its first major round of layoffs in a decade, eliminating 1,800 corporate roles as part of a push to simplify operations and reignite stagnant sales.
The cuts, announced on a Thursday in a memo from incoming CEO Michael Fiddelke, consist of approximately 1,000 employee layoffs and the elimination of about 800 open positions. This represents an estimated 8% reduction of the retailer’s corporate workforce.
The layoffs do not affect roles in Target’s stores or supply chain.
Why the Cuts?
Target’s leadership stated the job eliminations are a “necessary step” to accelerate growth after four years of flat sales and a recent stock decline. Fiddelke explained in his memo that “the complexity we’ve created over time has been holding us back,” with “too many layers and overlapping work” slowing down decision-making.
The company has struggled with declining store traffic and inventory problems, and its shares have fallen by 65% since late 2021. Target is considered more vulnerable than competitors like Walmart because a higher percentage of its sales come from discretionary items (about 50% vs. Walmart’s 40%).
Transition and Support
- New Leadership: The announcement comes as Target prepares for a leadership change. Fiddelke, currently the Chief Operating Officer, will take over as CEO on February 1.
- Employee Severance: Affected corporate employees will be notified on the following Tuesday and will receive pay and benefits until January 3, along with severance packages.
