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Target announced on Thursday that it will eliminate around 1,800 corporate positions, marking the retailer's first major layoffs in about a decade.

The move comes as the Minneapolis-based company aims to reverse years of sluggish sales and streamline its operations.

In a memo to employees, incoming CEO Michael Fiddelke, who takes the helm on February 1, explained that overlapping roles and complex layers have slowed decision-making at the company.

"Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life," Fiddelke said. "It's a necessary step in building the future of Target and enabling the progress and growth we all want to see."

According to Reuters, the cuts affect roughly 8% of Target's corporate workforce and include about 1,000 layoffs alongside 800 open positions that will no longer be filled.

Employees impacted by the reductions will receive pay and benefits through early January, along with severance packages. Store and supply chain roles are not affected.

Fiddelke, a 20-year Target veteran, was named CEO in August following Brian Cornell's departure.

His appointment was met with skepticism from some investors, who questioned whether he could address ongoing challenges, including merchandise missteps, inventory issues, and declining store traffic.

Target Hit by Tariffs, Discretionary Sales Decline

Target has faced four years of mostly stagnant sales, with shares dropping nearly a third this year and down 65% since their all-time high in late 2021.

The company has also been pressured by US tariffs on imported goods and draws a significant portion of its revenue from discretionary items like clothing and electronics.

About half of Target's sales come from discretionary merchandise, compared to roughly 40% at Walmart, making Target more vulnerable to shifts in consumer spending, CNBC reported.

The retailer's recent Enterprise Acceleration Office initiative, led by Fiddelke, sought to simplify operations, leverage technology, and accelerate growth.

He said the layoffs are part of this larger effort to remove inefficiencies and speed up decision-making.

"The truth is, the complexity we've created over time has been holding us back," Fiddelke said. While acknowledging the layoffs are difficult, he emphasized they are necessary to prepare Target for the future.

Affected corporate employees will continue to receive compensation and benefits through January 3.

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