Target will cut 1,800 corporate jobs, the US retail giant told employees on Thursday, as the struggling company pushes to reverse four years of stagnant sales.
The layoffs, to be rolled out next week, mark the retailer’s first major downsizing in a decade and will slash roughly 8% of its global corporate workforce.
“Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life,” incoming chief executive Michael Fiddelke said in a memo.
Several quarters of weak sales and a slumping stock price have set Target behind Walmart and other rivals. Shoppers have curtailed non-essential spending, while backlash over diversity policies has added to Target’s woes.
Mr Fiddelke, a 20-year veteran of the company, called the layoffs a “necessary step in building the future of Target”. He was named chief executive in August and is set to take over from Brian Cornell, the company’s current leader, in February.
About 1,000 corporate employees are poised to be laid off, and 800 vacant roles will no longer be filled, a Target spokesperson said.
More details are set to be announced on Tuesday. Mr Fiddelke asked US corporate employees to work from home next week.
The layoffs will not affect retail employees who work at Target’s nearly 2,000 stores across the US.
Target has historically been known for its affordable clothes and wide range of cheap groceries, homeware, electronics and toys.
But non-essentials like clothing and electronics account for roughly half of the company’s sales making it vulnerable in recent years as customers have curbed spending on extras in the face of rising prices and uncertainty about tariffs.
On top of macroeconomic headwinds, the retailer’s financial struggles have also been linked to company-specific dynamics, including inventory issues and backlash following a previous decision to end diversity, equity and inclusion (DEI) targets.
Target’s share price has fallen 30% this year, while Walmart’s stock has gained nearly 18%.
Target in May warned that sales would be lower than previously expected this year, amid concern about how a consumer pull-back on discretionary items might affect its business. It held its forecast steady in August and narrowly beat quarterly earnings expectations.
When he was appointed chief executive, Mr Fiddelke said in a statement that the company had “work to do”, and needed to move “faster, much faster”. He pledged to improve the quality of products on offer and to embed more technology in the business.
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