Target has announced that it will eliminate 1,800 corporate jobs as part of a wide-ranging effort to streamline operations and revive growth after four years of flat sales. The decision marks the retailer's first significant round of layoffs in a decade and comes as the company prepares for a leadership transition at the top.
In a memo to staff, incoming chief executive Michael Fiddelke confirmed that the cuts represent around eight per cent of Target's corporate workforce. About 1,000 employees will be laid off, while another 800 positions will remain unfilled. Workers affected by the restructuring will be informed next Tuesday.
New Management Sees Changes as a Necessary Step
Fiddelke, currently the chief operating officer, will officially take over from long-time leader Brian Cornell on 1 February. He described the changes as a necessary step in simplifying the organisation and reducing bureaucracy. '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.'
According to a company spokesperson, the cuts will not affect employees working in stores or distribution centres. Affected staff will receive pay and benefits until 3 January, along with severance packages.
Restructuring Follows Years of Weak Performance
The announcement follows a prolonged period of stagnant sales and falling market share. Target has struggled with declining store traffic, inventory mismanagement, and uneven consumer demand. Analysts expect annual revenue to decline again this year, extending a four-year slump.
The company's share price has dropped about 65 per cent since its 2021 peak. Over the same period, Walmart's shares have also more than doubled, underscoring Target's widening gap with its most significant rival. Analysts then say in a report that the difference lies partly in product mix. Around half of Target's revenue comes from discretionary items such as clothing and homeware, compared with roughly 40 per cent at Walmart, which benefits from steady grocery and essentials sales.
As a result, Target has been more exposed to shifts in consumer sentiment and inflation pressures, particularly as shoppers focus on necessities.
New Strategy Focuses on Simplification and Efficiency
Fiddelke also oversees the Enterprise Acceleration Office, an internal initiative launched in May to accelerate decision-making and strengthen the company's technology use. He said the current round of layoffs forms part of that broader strategy. 'These changes will help Target move faster and make better decisions,' he said. 'This is about building the future of Target and enabling the progress and growth we all want to see.'
Industry analysts note that the company's challenge now is to restore investor confidence while navigating a more competitive retail landscape. The restructuring is expected to create a leaner management structure and pave the way for operational improvements in 2025.
Target's next earnings report will be closely watched for signs that the cuts are improving profitability. Investors and employees alike will be looking to see how effectively Fiddelke's leadership sets the retailer back on a path to sustained growth.
Originally published on IBTimes UK
