Target says it will invest more in store staffing and training while Target cuts jobs at distribution centers and regional offices—about 500 in total—to improve customer experience and revive growth under new Chief Executive Officer Michael Fiddelke.
The big-box retailer announced the changes Monday in an internal memo obtained by CNBC, outlining a reallocation of resources toward front-line store workers after complaints about messy shelves, out-of-stock items and longer checkout lines.
Target said it will reduce the number of store districts and redirect savings into additional labor hours and new guest experience training at nearly 2,000 U.S. stores. About 100 of the job cuts will occur at the store district level, with roughly 400 more across supply chain sites.
“This change also 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 memo said.
The message was signed by Chief Stores Officer Adrienne Costanzo and Chief Supply Chain and Logistics Officer Gretchen McCarthy and sent to employees across Target’s headquarters and store field teams.
A Target spokesperson declined to disclose the size of the additional investment but said starting wages for store workers will remain unchanged, ranging from $15 to $24 per hour depending on location. This shift in resources follows reports that Target cuts jobs at the corporate and distribution levels.
Retailer Shifts Payroll Toward Front-Line Workers
Target has faced mounting criticism from shoppers who say the retailer’s stores look sloppier than in the past and lack the attentive service that once set the brand apart.
The company believes that adding labor hours and simplifying oversight structures will help restore consistency across locations and ease pressure on store managers.
Almost all of Target’s online orders are fulfilled in stores, a model that has added workload for employees who must juggle stocking shelves with picking and packing digital orders. Last year, Target began designating some stores primarily for shipping online orders while removing that function from others.
The new staffing changes , alongside the recent Target cuts jobs, build on those efforts to streamline operations and allow employees to focus more on in-store shoppers.
New CEO Moves to Reverse Years of Flat Sales
Fiddelke, formerly Target’s chief financial officer and chief operating officer, stepped into the top role on Feb. 1 as the company seeks to regain momentum after roughly four years of flat annual sales.
Target cut 1,800 corporate jobs last year in its first major layoffs in a decade, signaling a broader push to reduce costs and sharpen focus.
In an October interview, Fiddelke said his top priorities include restoring Target’s reputation for style and design, delivering a more consistent customer experience and using technology to move faster.
“If you’re a store manager now, yes, you’re supporting your in-store guest, and you’re also running a fulfillment business that’s gotten pretty big,” Fiddelke said. “We’ve got to make sure that we’re doing both really well, and it’s more complex than it used to be.”
Target has also faced tougher competition from Walmart and other discount retailers as consumers become more selective about discretionary spending while paying more for necessities such as groceries and rent. This economic pressure is a key factor behind the recent news that Target cuts jobs.
Company Previews Broader Turnaround Plan
Beyond operational challenges, Target has weathered boycotts and backlash tied to shifting positions on social and political issues, which some analysts say have muddied the brand’s identity.
Customers and investors alike say the retailer has lost some of the “Tarzhay” appeal associated with trendy merchandise and strong service.
Target is expected to share more details about its turnaround strategy when it reports holiday-quarter earnings and a full-year forecast on March 3. The company will also host an investor event at its Minneapolis headquarters.
Executives say the staffing shift, along with the recent Target cuts jobs, is an early step in a longer effort to simplify the business and win back shoppers.
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