Target is reducing approximately 1,800 corporate positions in its first significant layoff in around a decade, as the retailer attempts to turn around several years of stagnant sales growth and streamline its operations.
The announcement was made in a memo to staff on Thursday by Target’s new CEO, Michael Fiddelke. This restructuring comes at a time when Target’s share price has lagged behind that of its competitors, and the company faces criticism for shifting its stance on diversity, equity, and inclusion policies.
In the memo, Fiddelke, who takes the helm in February next year, stated that “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life. It’s a necessary step in building the future of Target.”
The move will impact approximately 8 percent of its corporate staff, which entails closing 800 vacant jobs. The employees who will lose their jobs will be paid and given benefits till early January, and will have severance packages.
The reductions, which the managers will be affected more than the individual contributors, do not affect the store or supply chain positions.
Target had appointed insider Fiddelke to the position of CEO in August, a move that was derided by investors who did not see the 20-year company veteran as capable of rectifying the numerous issues of the company, such as its merchandise missteps and problems in inventory management.
The firm that has seen its stock decline almost one-third, moreover, this year has struggled with 11 consecutive quarters of low or falling similar, alongside the pressure of U.S. tariffs on foreign imports.
It also held its annual predictions in August after reducing them in May when it attributed the poor demand to the largely discretionary merchandise that it sells, such as clothing and electronics.
