Target cuts 500 jobs, invests more money in store staffing

Target on Monday took steps toward streamlining its retail model by putting more money toward frontline store employees while cutting about 500 office and supply chain jobs.

The retail giant indicated in an internal memo seen by FOX Business that it will reduce the number of store districts – which are regions that Target stores are grouped into – to facilitate payroll for more workers and hours, as well as guest experience training for store staff. The news was first reported by CNBC.

Target’s layoff plans are expected to impact about 100 people at the store district level and about 400 across the company’s supply chain sites, according to the internal email sent to employees by Chief Stores Officer Adrienne Costanzo and Chief Supply Chain and Logistics Officer Gretchen McCarthy.

“We have already shared the news with team members directly impacted, and we’ll be supporting them through this transition with a range of resources and benefits,” the memo said.

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The change “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 executives wrote.

The announcement does not change the starting pay for workers, according to a Target spokesperson, who declined to specify the amount of money being invested in the stores.

Target CEO Michael Fiddelke, who moved into the top job earlier this month, indicated in October that the company would cut about 1,800 corporate roles as the big box retailer undergoes its first major layoff in nearly a decade.

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Fiddelke is hoping to lead a successful turnaround effort that will drive growth at Target, as the retailer’s sales have slumped over the last several years.

On Tuesday, the company announced changes at the executive level. Cara Sylvester was named chief merchandising officer and Lisa Roath was appointed chief operating officer. 

Fiddelke said in a memo to employees after taking charge that his priorities will include sharpening Target’s merchandise mix while improving stores and the retailer’s website to make shopping easier and more appealing.

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Fiddelke also said the company plans to use technology to streamline operations and personalize the customer experience, and indicated the company plans to invest more in its employees and strengthen ties to communities where it operates.

“Priority 1 through 10 is accelerating Target’s growth,” Fiddelke said in an emailed statement to FOX Business earlier this month, adding that the company is “moving with urgency and focus.”

FOX Business’ Daniella Genovese and Reuters contributed to this report.