Target Announces Major Layoffs. They’re Part of the New CEO’s Turnaround Plan.

Target is laying off 1,000 employees and cutting 800 open roles. (Kamil Krzaczynski / AFP / Getty Images)

Key Points

• Target is cutting nearly 2,000 corporate jobs, including 1,000 layoffs and 800 eliminated open roles, reducing its corporate workforce by about 8%.
• The job cuts at Target will affect manager roles at three times the rate of other employees, with no impact on in-store or supply-chain positions.
• Affected Target corporate employees will receive pay and benefits until January 3, along with severance packages and other services.

Target’s incoming CEO, Michael Fiddelke, isn’t taking over the retailer’s reins until February. But as current chief operating officer, he’s already laying the groundwork for his efforts to turn the ailing company around, including by cutting nearly 2,000 corporate jobs.

The company plans to lay off around 1,000 global corporate employees and close out 800 open roles. The move trims Target’s corporate workforce by about 8%, with most of the layoffs concentrated in the U.S.

“The truth is, the complexity we’ve created over time has been holding us back,” Fiddelke wrote in a memo sent to staff reviewed by Barron’s. “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.”

The Wall Street Journal first reported the news Thursday.

Manager roles will be affected at about three times the rate of rank-and-file employees, the company said, and no in-store or supply-chain roles will be impacted.

Target has asked corporate employees to work from home next week as the company carries out the layoffs. Affected workers will continue to receive pay and benefits until Jan. 3, in addition to severance packages and other services.

Target stock ticked up 0.5% to $94.71 in after-hours trading Thursday. Shares have dropped 30% this year and are off 65% from their Nov. 16, 2021, all-time closing high. The stock has been battered by a host of investor concerns, including declining sales and foot traffic, shrinking profits, and a steady deterioration in the store experience.

Fiddelke is under pressure from investors to take fast, drastic actions to turn business around. His appointment, announced in August, drew an icy reception from Wall Street, which was pushing for an outside hire to replace outgoing CEO Brian Cornell.

The layoffs, along with other recently announced initiatives, such as the midnight release of Taylor Swift’s The Life of a Showgirl album, expanding next-day shipping offerings, and investing over $4 billion in the shopping experience this year, aim to showcase Fiddelke’s commitment to making Target a more agile organization, the company said.

“Today is an important step toward our key priorities: strengthening our retail leadership in style and design, enhancing the guest experience and expanding how we use technology to fuel our next chapter of growth,” Fiddelke said in an emailed statement to Barron’s.

Write to Sabrina Escobar at sabrina.escobar@barrons.com