Target Cuts 475 Jobs, Drops Insurance For Part-Timers
Retail giant Target Corporation is cutting roughly 475 positions, while it has decided that an additional 700 open positions will remain vacant for good.
And at least one analyst suspects there may be more cuts on the horizon.
Target's latest downsizing comes as the retailer is experiencing significant challenges. It's struggling to mend consumer confidence in the wake of a massive data breach that hit during the all-important holiday shopping season, and the company's 2013 expansion into Canada appears to be falling short of expectations.
Last October, Target laid off 150 corporate employees.
Hints about the most recent round of layoffs began bubbling up on social media early Wednesday afternoon. An earlier version of this story, which was written prior to receiving a response from Target, cited a Star Tribune report, which indicated all 475 cuts were occurring at Target's headquarters.
Target spokeswoman Molly Snyder told Twin Cities Business Wednesday afternoon that the cuts are being made “worldwide” and do not target a specific role or department. Snyder acknowledged that the cuts have an impact on Target's Twin Cities work force but declined to specify exactly how many Minnesota jobs are being lost. So the exact impact in the Twin Cities is unclear.
The Star Tribune, however, citing unnamed sources, later reported that the vast majority of the cuts were at Target's headquarters.
Target currently employs about 11,000 at its downtown Minneapolis headquarters; when accounting for other campuses such as the one in Brooklyn Park, the company has about 14,000 corporate employees throughout the Twin Cities, Snyder said. In addition to the job cuts announced Wednesday, the company identified, during the past six months, 700 open positions and decided to “close” them, she added.
Regarding the layoffs, Target e-mailed the following statement: “As an organization, Target continually assesses our operating model to ensure we are well-positioned to adapt to changing business needs. Today we informed our team that approximately 475 positions are being eliminated worldwide. We believe these decisions, while difficult, are the right actions as we continue to focus on transforming our business. We will continue to invest in key business areas to strengthen our ability to compete and thrive well into the future.”
Following news of the planned layoffs, New York retail analyst Howard Davidowitz told Minnesota Public Radio that there may be more cuts to come. “If business continues soft, management must react on the expense line,” he told MPR. “In other words you can't allow overhead to grow out of proportion. Target is a discount business.”
The news of job cuts surfaced shortly after Target revealed on its corporate blog that it is dropping health insurance for its part-time workers, although it will give $500 to those who are currently covered, to help them buy health insurance. The retailer said it believes new health insurance exchanges created under the Affordable Care Act provide insurance options that such part-time employees may prefer.
The change is effective April 1. Target disclosed the news in an online Q&A with Jodee Kozlak, its executive vice president of human resources.
In 2013, Twin Cities Business explored in a series of webinars and e-newsletters the many changes being brought about by the Affordable Care Act and how they are affecting local businesses. Learn more here.