Target, the Minneapolis based retailer, announced on Thursday that it will cut 1,800 corporate jobs as part of an effort to restart growth after four years of flat sales. This is the company’s first major round of layoffs in 10 years. The decision was shared in a memo from Target’s incoming CEO, Michael Fiddelke, to employees at the company’s headquarters.
The cuts include about 1,000 layoffs and another 800 positions that will remain unfilled, making up roughly 8% of Target’s corporate workforce.
Reason behind Target lay-offs
In his memo, Fiddelke said the layoffs were necessary to make the company faster and more efficient. “The truth is, the complexity we’ve created over time has been holding us back,” he wrote. “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life.”
He added that the “job cuts were difficult but a necessary step in building the future of Target and enabling the progress and growth we all want to see.”
Employees who lose their jobs will continue to receive pay and benefits until January 3, along with severance packages. The company confirmed that no store or supply chain roles will be affected.
New CEO Fiddelke to take charge in February
The layoffs are happening right before the company undergoes a leadership change. Michael Fiddelke, currently serving as Chief Operating Officer and formerly the Chief Financial Officer, will step in as CEO on February 1, taking over from longtime leader Brian Cornell.
Target has been struggling with slow sales, fewer customers visiting stores, inventory problems, and consumer backlash. The company expects its sales to fall again this year. Since reaching a record high in 2021, Target’s share price has dropped by 65%, according to a report by CNBC.