The American supermarket chain Target, one of the most popular in the country, announced this Thursday that it plans 1,000 layoffs and the elimination of 800 vacant positions to reduce its global corporate workforce by 8% and “simplify” its business structure.
Target CEO Michael Fiddelke indicated in an internal email to employees that the company’s “complexity” prevents it from progressing and “too many layers and overlapping work have slowed down decisions, making it difficult to execute ideas,” reports The Wall Street Journal.
Fiddelke, who was appointed in August and took over in September, added that the company will report the changes next Tuesday and asked all office employees in the US, who will be most affected by the layoffs, to work from home next week.
The newspaper also points out that management positions are in the spotlight, and those who are fired will receive their salaries until January and may be eligible for severance pay.
Fiddelke said the workforce reduction will allow progress toward its “key priorities”: regaining competitiveness in the style and design segment of the retail sector, improving the shopper experience and using “technology to drive the next episode of growth.”
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On August 20, Target announced another quarter marked by the decline in sales and traffic in its stores, part of the problems plaguing the retail sector, and revealed the promotion of the then director of operations, Fiddelke, news that generated a drop in its shares of almost 10%.
The company reported operating income of $1.3 billion in the second quarter, 19% less than the same quarter a year earlier, but its total revenue of $25.2 billion fell less than 1% year-on-year, and online sales increased 4%.
Target was recently in the spotlight for withdrawing its diversity, equity and inclusion initiatives to align with the policies of the Donald Trump Administration, which generated calls for a boycott, and like other firms, it has suffered the effect on consumption of its tariff policies.
Apart from that, according to economic media, it has lost market share to the Walmart supermarket chain, which is the largest retailer in the United States and the world.
With information from EFE
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