Minneapolis-based retail giant Target Corporation has announced a significant restructuring effort that will result in the elimination of approximately 1,800 corporate positions. This move, which represents roughly 8% of its global corporate workforce, marks the company’s first major layoffs in a decade. According to the retailer, about 1,000 employees will be laid off directly, while an additional 800 open roles will not be filled.
The announcement comes as Target faces multiple challenges, including declining sales, shifting consumer behavior, and backlash over changes to its diversity, equity, and inclusion (DEI) initiatives. Company leadership emphasized that these Target layoffs are part of a strategic effort to streamline operations, speed up decision-making, and better position the company for long-term growth.
Leadership Transition and Strategic Goals
The Target layoffs coincide with a leadership transition. Michael Fiddelke, currently Chief Operating Officer and former Chief Financial Officer, will succeed longtime CEO Brian Cornell in February 2026. Fiddelke has led initiatives such as the Enterprise Acceleration Office, which focuses on simplifying operations, leveraging technology, and accelerating company growth.
In a memo to employees, Fiddelke stressed that the layoffs were not primarily about cost-cutting. Instead, they are designed to eliminate overlapping responsibilities and reduce organizational complexity. “The truth is, the complexity we’ve created over time has been holding us back,” he wrote. “Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life. These changes are necessary to build the future of Target and enable the growth we all want to see.”
Impact on Employees
Employees affected by the Target layoffs will continue to receive pay and benefits until January 3, 2026, and will also receive severance packages. Importantly, these reductions are limited to corporate roles, with no positions affected in Target stores or the supply chain. While the layoffs come just before the critical holiday shopping season, the company said the timing was aligned with its broader strategic plan rather than seasonal considerations.
Sales Challenges and Economic Pressures
Target has struggled with declining sales for three consecutive quarters, a trend that has been influenced by inventory issues, shifting consumer preferences, and growing competition from retailers such as Walmart, Amazon, and Costco. The company has particularly seen weakness in discretionary categories such as home goods and apparel.
A significant factor contributing to the Target layoffs is the company’s reliance on discretionary products, which make up roughly half of its total sales. This contrasts with Walmart, where discretionary items account for about 40% of sales, giving it a more stable revenue base during economic fluctuations. Target’s dependence on non-essential goods has made it more sensitive to shifts in consumer sentiment, leading to lower sales and pressure on corporate operations.
The company’s stock has mirrored these challenges. Target’s shares have fallen about 30% in 2025 and declined 41% since their peak in late 2021. Comparatively, Walmart’s stock has risen approximately 123% over the past five years, highlighting the contrasting performance between these retail competitors.
Backlash Over DEI Policy Changes
Another factor affecting Target’s performance has been the company’s decision to scale back certain DEI initiatives. Target had previously been recognized as a leader in diversity and inclusion efforts, but its recent policy changes drew criticism from employees and external supporters. This backlash is believed to have contributed to weaker sales, demonstrating the delicate balance companies must maintain between operational strategy and social responsibility.
Strategic Rationale Behind the Target Layoffs
The Target layoffs are part of a broader corporate strategy to make the organization more agile. By reducing layers of management and eliminating overlapping roles, the company aims to speed up decision-making and improve efficiency across its corporate operations.
Fiddelke’s memo emphasized that these changes are urgent to help the company adapt to a rapidly evolving retail landscape. “We are taking steps to make Target stronger, faster, and better positioned for the future,” he said. While the layoffs are difficult for employees, leadership sees them as a necessary step in ensuring the company remains competitive.
The Enterprise Acceleration Office, led by Fiddelke, reflects Target’s commitment to modernization. Its mandate includes leveraging technology to optimize processes, simplify operations, and drive innovation. By streamlining the corporate structure, Target aims to execute new ideas more efficiently and respond more quickly to market changes.
Financial Implications
Although Target has stated that the Target layoffs are not primarily intended to cut costs, the company may experience financial benefits from a leaner corporate structure. Reducing headcount and leaving open positions unfilled can free up resources for investment in technology, e-commerce, and other strategic areas.
Economic pressures, however, continue to pose challenges. Inflation, rising interest rates, and changing consumer priorities affect discretionary spending, which forms a substantial part of Target’s revenue. These factors underscore the urgency of the company’s restructuring effort.
Industry and Market Context
Analysts point out that Target’s struggles are both company-specific and reflective of broader trends in the retail industry. E-commerce competition, changing consumer preferences, and economic uncertainty have disrupted traditional retail models. Target’s relatively smaller footprint in essential goods like groceries, compared to competitors such as Walmart and Costco, has further amplified the impact of these challenges.
Despite these hurdles, Target maintains significant strengths, including brand loyalty, extensive store and digital infrastructure, and a large customer base. The Target layoffs and restructuring efforts aim to capitalize on these strengths while addressing operational inefficiencies and market vulnerabilities.
Employee Morale and Public Perception
Employee morale and public perception remain key considerations as Target navigates this transition. Layoffs, particularly ahead of the holiday season, can create uncertainty among remaining employees and attract public scrutiny. Target has sought to mitigate these effects by offering extended benefits, severance packages, and clear communication regarding the purpose of the layoffs.
Fiddelke’s messaging frames the Target layoffs as a strategic move necessary for long-term growth rather than a purely financial decision. The company aims to reassure employees, investors, and customers that it is taking proactive steps to adapt to a competitive and rapidly changing retail landscape.
Conclusion
The Target layoffs mark a major turning point for the company, with 1,800 corporate positions impacted in its first significant workforce reduction in a decade. These layoffs occur amid stagnant sales, declining stock performance, and backlash over DEI policy changes. As Target prepares for the leadership transition from Brian Cornell to Michael Fiddelke, the company emphasizes that the restructuring is essential to streamline operations, accelerate decision-making, and adapt to shifting consumer trends.
While these layoffs are undoubtedly difficult for affected employees, Target’s leadership believes that the changes are necessary to ensure the company remains competitive and capable of achieving long-term growth. With a renewed focus on operational efficiency, technology adoption, and organizational agility, Target aims to strengthen its market position and navigate the challenges of a rapidly evolving retail industry.
FAQs
Why is Target laying off corporate employees?
Target is reducing its corporate workforce to streamline operations, simplify decision-making, and position the company for future growth. The layoffs are part of a broader organizational restructuring, not primarily a cost-cutting measure.
How many employees are affected by the layoffs?
Approximately 1,800 corporate positions are being impacted, including about 1,000 layoffs and 800 open roles that will no longer be filled. This represents roughly 8% of Target’s global corporate workforce.
Will store or supply chain employees be affected?
No, the layoffs are limited to corporate roles. Employees working in Target stores or the supply chain will not be impacted.
What benefits will affected employees receive?
Employees affected by the layoffs will continue to receive pay and benefits until January 3, 2026, in addition to severance packages.
Is this layoff related to Target’s financial performance?
While Target has experienced stagnant sales and a declining stock price, the company stated the layoffs are not primarily about reducing costs but rather about reorganizing the corporate structure to operate more efficiently.
Who is leading Target during this transition?
Michael Fiddelke, Target’s Chief Operating Officer, will succeed CEO Brian Cornell on February 1, 2026. Fiddelke has been overseeing initiatives aimed at accelerating growth and simplifying company operations.
How have sales trends affected this decision?
Target has seen declining sales for three consecutive quarters, particularly in discretionary categories like home goods and apparel. This slowdown, combined with changing consumer preferences, has prompted the company to restructure.
Did Target face backlash over corporate policies?
Yes, Target’s decision to scale back some diversity, equity, and inclusion (DEI) initiatives drew criticism and may have contributed to weaker sales, as it alienated some supporters of the programs.
How does Target compare to its competitors?
Target relies heavily on discretionary items for revenue, making it more sensitive to economic fluctuations. Competitors like Walmart and Costco have a larger portion of sales from essential goods, which has helped them outperform Target in recent years.
