Target had a better start to 2017 than analysts expected (thanks, Nintendo and Victoria Beckham!).
But the company is nixing a few dozen positions at its Minneapolis headquarters as part of a merchandising strategy.
Target said in a statement 39 “headquarters-based team members” were told Thursday their positions have been eliminated. They’ll be given a chance to search for another job within the company for a period – and if they can’t find one that fits, or choose to leave Target altogether, they’ll get a separation package.
“While these decisions are never easy, we believe this is the right decision to position Target for future success,” a spokesperson said.
So what is Target doing?
Target is trying to “modernize” its merchandising. The company will be rolling out a new operating model with the merchandise team this summer, that it says will allow for better data and analytics capabilities, among other things.
The end result “ultimately will help Target to deliver faster for our guests,” the statement reads.
Target is one of the biggest employers in Minnesota. The Bullseye has an estimated 26,694 workers in the state – behind only the Mayo Clinic, plus the state and federal governments for number of employees.
But the brand has been struggling (at least relative to before) in recent years. Its grocery business still hasn’t gained traction, and was among the biggest reasons for a drop in sales so far in 2017. Successes in other areas – like the signature Victoria Beckham apparel line, and Nintendo’s launch of the mega popular Switch – have provided a boost.
The company is also in the middle of some significant store redesigns and revamps.
Execs expect low single-digit sales declines to continue in the 2nd quarter and beyond.
Brian Cornell, chairman and CEO of Target, said Wednesday: “We are in the early stage of a multi-year effort to position Target for profitable, consistent long-term growth, and while we are confident in our plans, we are facing multiple headwinds in the current landscape. As a result, we will continue to plan our business prudently while preparing our team to chase business when we have an opportunity.”