Target cuts office and warehouse jobs, shifting 'significantly more payroll' to stores

By Bill Peters

Target's new CEO makes leadership changes to simplify the reporting structure, including the departure of its chief commercial officer

Target has suffered from years of stalled sales at its big-box stores.

Target is cutting around 500 jobs, as the big-box retailer's new CEO tries to put more money into making its stores more appealing places to shop.

Monday's move arrives a little more than a week after Michael Fiddelke became Target's (TGT) new CEO, and after the chain cut corporate staff by 8% last year.

The company also announced on Tuesday a number of changes to its management team, which Fiddelke said marked "the start of a new chapter" at Target, as he moves quickly to simplify the reporting structure.

The job cuts would take place in distribution centers and regional offices, even as the company boosts store staff, according to a memo to employees seen by MarketWatch on Monday. Target said it also plans to pare down the number of store districts.

"This change also fuels our ability to put significantly more payroll in our stores - primarily in additional labor and hours where needed most, but also in new guest-experience training for every team member at every store," the memo said.

The memo said that Target would eliminate around 100 jobs at the store-district level and some 400 across sites involved with the company's supply chain. Bloomberg News and CNBC reported the news earlier in the day.

Shares of Target rose 0.6% in premarket trading, putting them on track to open at an 11-month high. Over the past 12 months, the stock has lost 12% through Monday, while the S&P 500 index SPX has advanced 14.8%.

On Thursday, the company said that Cara Sylvester, currently the chief guest experience officer, will become the singular chief merchandising officer, effective Feb. 15. Lisa Roath, who was CMO for food, essentials and beauty, will become chief operating officer.

The CMO for apparel and accessories, Jill Sando, will retire, and Chief Commercial Officer Rick Gomez will leave the company.

The company said it would look outside the company for a chief guest experience and marketing officer.

Target also affirmed its previous guidance for fourth-quarter sales and full-year earnings per share. The company is slated to report fourth-quarter results in early March.

Fiddelke became Target's new CEO on Feb. 1, after years of stalling sales at the big-box chain, which has struggled to find itself amid a broader consumer flight to bargains and steep competition from Walmart (WMT), Costco (COST) and Amazon (AMZN).

In a message last week, Fiddelke said the company needed to reclaim its sense of style, lean on technology and make store visits and interactions online easier.

-Bill Peters

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