NEW YORK — Target will cut “several thousand” jobs over the next two years, the company said Tuesday, as it sharpens merchandise and spends more on digital initiatives.
“The restructuring will be concentrated at Target’s headquarters locations and focus on driving leaner, more efficient capabilities, removing the complexity and allowing the organization to move with greater speed and agility,” the company said in a statement.
The cuts are part of the first broad-based strategy to drive sales and earnings growth announced by Brian Cornell, who became Target’s chief executive last August.
The Minneapolis-based firm aims for $2 billion in savings even as it increases its spending on digital initiatives. Target employs about 350,000 globally and 13,500 at its headquarters operations in the Twin Cities. It is the largest employer in downtown Minneapolis, where about 10,000 of its employees work.
At a meeting with investors and analysts in New York, Cornell said Target “lost its balance” in the wake of the 2008 economic downturn. He said the firm needs to sharpen its focus on products in four categories: style, baby, kids and wellness. The firm also needs to revamp its food offerings, he said.
The last time Target held a financial community meeting was in October 2013. It was held in Toronto because Target was in the midst of the first year of a major expansion into Canada. While the division was already having problems, executives at that meeting told analysts they were still expecting $6 billion in sales from Canada by 2017 as originally planned.
A lot has changed since then. The CEO who resided over that meeting, Gregg Steinhafel was ousted last May. Cornell was hired. And in January, he pulled the plug on Canada, setting in motion the shuttering of 133 stores.
In 2011, Steinhafel had laid out a plan for Target to grow sales $30 billion over five years to hit $100 billion in annual sales. The retailer abandoned that goal last fall after failing to get near it. Target’s 2014 revenue was $73 billion.
