Some Target store employees will reportedly see no raise as new CEO Michael Fiddelke launches a major restructuring that will also cut hundreds of jobs across the company, according to reports.
Starting pay for Target employees, which typically ranges from $15 to $24 an hour depending on location, will stay the same under the restructuring plan, the outlet reports.
The shakeup marks the first major move by Fiddelke, who officially took over as CEO on February 1. It is expected to result in the elimination of about 400 positions across Target’s supply chain operations, along with roughly 100 roles at the store district level, according to the report.
Target said the job cuts will not affect store-level positions, but some regional offices will be closed as part of the reorganization.
Starting pay for Target store workers will remain $15 to $24 an hour, depending on location, under the restructuring, according to a NBC News report
In a memo reportedly sent Monday, company leaders said the latest restructuring is meant to help store employees “work more efficiently and with more focus,” as Target simplifies parts of its organization and shifts resources closer to the sales floor.
The company said workers affected by the job cuts have already been notified and will receive support, including access to benefits and transition resources.
The Independent has contacted Target representatives for comment.
Target, which runs nearly 2,000 stores across the U.S., has been struggling to keep up with rivals like Walmart and Amazon as shopping habits change. The company has posted weak or declining sales for 12 straight quarters, according to The Minnesota Star Tribune. The company’s stock is down more than 20 percent over the past year, with executives pointing to softer consumer spending on items like home décor and apparel.
The broader economy hasn’t helped. Inflation has pushed many consumers to cut back on discretionary spending, hitting the kinds of nonessential items that have long been a big part of Target’s brand. At the same time, shoppers have complained about messy store layouts and inconsistent merchandise, saying some locations no longer feel like the polished, affordable-chic Target they’re used to.
To streamline operations, the company cut 1,800 corporate jobs in October and is now pushing changes to modernize the business, including AI-powered shopping partnerships with OpenAI and Google and a revamp of its beauty department. Target’s shop-in-shop partnership with Ulta is set to end in August.
Target has also found itself in the middle of heated cultural and political debates in recent years. The company has faced criticism from multiple sides over how it handled diversity, equity and inclusion initiatives, along with backlash tied to public safety concerns and unrest in Minneapolis, where Target is headquartered.
In an effort to win customers back, Target rolled out its so-called “10-4 program” last year, an internal training effort that encourages employees to make eye contact, smile and be more welcoming when they’re within 10 feet of shoppers.