Target on Tuesday laid off 1,700 employees at its headquarters in Minneapolis as part of an effort to save $2 billion over the next two years. That cuts were coming was first announced last week in the company’s “roadmap to transform business.” Target is also shedding 1,400 open jobs at its headquarters in an effort to make operations there “more agile, efficient and guest-focused.”
In the short term, those layoffs are expected to cost the retailer. Each Target employee who was laid off will get at least 15 weeks of pay as well as severance checks determined by the length of their employment. Target says total severance costs will set it back about $100 million in the first quarter.
Only a few months into 2015, it’s clear that Target is looking for something of a fresh start. In January, the company elected to shutter its disastrous Canadian business after less than two years of operation. The 133 rapidly constructed stores had lost money since they opened and were known for their empty shelves and bureaucratic chaos. Target has also continued to grapple with the fallout from a late 2013 data breach that affected an estimated 70 million people, drove customers from its stores, and put the company’s stock in free fall.
That said, Target has rebounded significantly since last November. The stock spiked on the viral #AlexFromTarget sensation as well as strong expectations for Black Friday weekend. Shares fell 1.15 percent on Tuesday, but over the past four months have added more than 20 percent.
As part of its turnaround plan, Target intends to adopt a “channel-agnostic approach” to growth, meaning it will focus equally on in-store, online, and mobile experiences. The company also aims to reclaim the cheap-chic formula that first earned it the Tar-zhay pronunciation. Hey, whatever helps.