Target just started firing thousands of workers.
The company said Tuesday that it was cutting 1,700 jobs and leaving another 1,400 positions unfilled.
“Today is a very difficult day for the Target team, but we believe these are the right decisions for the company,” the company said in a statement.
The Minneapolis Star Tribune spotted employees leaving Target’s Minneapolis headquarters Tuesday morning carrying boxes of belongings. They told reporters that they were among those affected by the layoffs.
“Some vice presidents were terminated last week, employees told the Star Tribune on Monday, in the first of what the company has said will be ‘several thousand’ job cuts,” the Star Tribune’s Adam Belz writes. “One employee who declined to be identified said that probably a couple of dozen upper managers were let go Monday and gone by lunch.”
The retailer revealed plans last week to eliminate thousands of positions as part of a $US2 billion cost-savings plan, but at the time the company didn’t provide a timelines or specific numbers.
The cuts will primarily affect positions at the company headquarters.
“We know that to compete in this evolving retail environment, we must simplify how we work,” the company said Tuesday. “We must reduce complexity and act with a greater sense of urgency.”
Target employs more than 350,000 workers globally. The company will be providing affected workers with more than 15 weeks of pay plus additional severance based on years of service.
Target CEO Brian Cornell told investors last Tuesday that the company “lost its balance” after the recession, according to the Minneapolis Star Tribune.
He said Target needed to prioritise four main categories of merchandise: style, baby, kids, and wellness. Those categories accounted for more than a quarter of the company’s sales last year.
Target will be investing more in its grocery offerings, he said.
“While we’re in the early days and there’s no doubt that transformation can be challenging, we’re taking the steps necessary to unleash the potential of this incredible brand,” Cornell said. “I’m encouraged by our early momentum, and am confident that by implementing our strategy, simplifying how we work, and practicing financial discipline, we will ignite Target’s innovative spirit and deliver sustained growth.”
Target is likely cutting jobs in part to recoup losses from its Canadian business, which the company recently abandoned.
The expansion into Canada cost Target about $US4.4 billion and racked up more than $US2 billion in losses.
Target had promised investors that the Canadian business, which was launched less than two years ago, would be profitable by the end of 2013.
The company hired Cornell in August and replaced the president of its Canadian operation to try to execute a turnaround. But its efforts failed.
Cornell announced in January that Target would be pulling out of Canada and closing more than 130 stores.
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