Target is tightening its belt due to slow sales, announcing the biggest round of layoffs the company has had in a decade. The news comes at the worst time for the affected employees, who may have to get through the holiday season without a job. Here’s what to know about the Target layoffs and how the changes will affect shoppers.
Why Is Target Laying Off Employees?
Despite Target’s slumping sales, the company claims that the corporate layoffs are not to cut costs. Instead, in a memo announcing the layoffs by incoming CEO Michael Fiddelke, the reason is that “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.”
The goal is to enable the “progress and growth” the company needs by eliminating some of the corporate red tape that can hinder flexibility and quick actions by a large corporation.
How Much Have Target’s Sales Dropped?
Despite the company’s official reason, it’s impossible to ignore that Target’s sales have been dropping significantly for three straight quarters.
Earlier this year, the company announced it was pulling back on its DEI programs and initiatives, something the retailer had always touted as a priority in the past. That angered many customers, who decided to spend their money elsewhere.
According to an earnings report published in August, Target’s second-quarter comparable sales dropped 1.9%, and its operating income was 19.4% lower than last year. The company’s stock price has fallen 30% this year alone and 65% from its 2021 high.
How Many People Are Getting Laid Off?
Target is going to lay off 1,000 corporate employees. Additionally, 800 open positions will be closed, meaning no one will be hired to fill those roles. In total, the layoffs will affect about 8% of Target’s global corporate workforce.
Employees affected by the cuts will receive notice on October 28, according to the memo. They’ll get pay and benefits through January 3, 2026, and will also receive severance packages.
Will This Affect My Target Store?
If you’re used to shopping at Target regularly, or plan to do so for some holiday shopping, don’t worry. The layoffs are only happening at the corporate level. The company emphasized that none of the affected roles are at Target stores or other supply chain locations. So you won’t have to worry about whether your store will be open extended hours before Christmas or if a gift you order online will get to you in time to put it under the tree.
More Retail News From Cheapism
- Starbucks Laying Off Hundreds of Workers, Closing Locations — The coffee giant recently laid off around 900 workers, following another round of layoffs earlier this year. Here’s what to know.
- How Costco Avoids Passing Tariffs on to Shoppers — The warehouse giant has a few tricks up its sleeve to shield shoppers from the effects of tariffs.
- Amazon to Dole Out $2.5 Billion in Checks to Customers for Settlement — Find out if you could be among those receiving a check from Amazon.
