After nearly a decade of holding off on major cuts, Target has announced corporate layoffs across its workforce. In a memo to employees on Thursday, new CEO Michael Fiddelke announced Target’s turnaround plan after falling share prices and declining sales numbers emphasized the need for a concentrated effort at reviving the business. Target’s job cuts are expected to affect 1,800 corporate roles, which is a management decision that has been echoed across industries.
As Target prepares to streamline its operations and introduce a new CEO to lead its teams, employees will face considerable changes of varying kinds while it comes to terms with the organization’s transition.
The Target corporate layoffs will affect 1,800 roles, designed to help the business “move faster and simplify” operations. (Image: Pexels)
Target Announces Corporate Layoffs: Ambitions to “Move Faster and Simplify” Operations Take Shape
Taking a page out of the books of other retailers, Target is in pursuit of job cuts, setting changes in motion to slash approximately 8% of its global HQ team. Reportedly, apart from eliminating 1,000 jobs, Target is also halting hiring for now, closing approximately 800 open roles. From the memo, it is apparent that the Target job cuts will be centered in the US for now. “As we make these changes, I’m asking all U.S. HQ team members to work from home next week. Target in India and our other global teams will follow their in-office routines,” Fiddelke stated in the memo.
According to Reuters, employees affected by Target’s corporate layoffs will receive their pay and benefits until January 3, along with their severance packages. The exact contents of the severance package have not been publicly revealed.
The company’s shares have fallen by 65% since their all-time high in 2021. Target’s job cuts are an answer to its ongoing sales slump, which has been facilitated by competitors taking over a larger segment of the market. Target’s withdrawal of its DEI policies has also affected the business’ public image considerably this year, with boycotts of the organization taking shape across the US.
Which Employees Will Be Affected by Target’s Corporate Cuts?
Target’s reorganization efforts are expected to primarily affect managers and will not extend to supply chain or store-based roles. The decision to eliminate corporate workers and managers is a sentiment that many other businesses have showcased, aiming to flatten a hierarchical model that has grown overly complex over the last few years.
Many businesses have segmented work into multiple divisions and added layers to their structure to facilitate decision-making. Unfortunately, these systems have slowly grown overly complex, holding up communication and slowing down the speed at which work circulates through the organization.
Fiddelke said as much regarding Target’s turnaround plan. “The truth is, the complexity we’ve created over time has been holding us back. Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life,” he explained in the memo. “It’s a necessary step in building the future of Target.”
As Target Eliminates 1800 Jobs, the Need for Strong Leadership Becomes More Apparent
Target’s turnaround plan doesn’t come as a surprise, as the organization is currently at the center of considerable transitions in leadership. Change at the top is frequently accompanied by a change in strategy and reorganization efforts to bring the company around to expected standards. A similar trend was witnessed at Intel with the arrival of CEO Lip-Bu Tan, and even at Starbucks, when Brian Niccol took over last year.
Target is in the middle of bringing on Fiddelke as its CEO. Having only recently been named for the position of CEO in August, Fiddelke has been faced with the gargantuan task of stabilizing a business that has witnessed 11 consecutive quarters of weak sales numbers. He will ascend from his role as Chief Operating Officer to the Chief Executive Officer position in February.
Moving to elevate an internal candidate to the position rather than bring in an outsider is a positive for many reasons. Not only does it allow someone who has experience with the organization to take over a leadership position, but it also promotes the idea of rewarding employees with career progress in exchange for their continued loyalty.
The decision to conduct layoffs so early in the incoming CEO’s journey is an unfortunate one, and will likely require additional effort to convince employees to rally behind his leadership of the organization. Difficult does not mean impossible, however. Target’s ability to handle the layoffs will determine how employees handle the changes to come. It will also shape how they respond to the enterprise acceleration efforts that Target is focused on for 2026.
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