Target Corp. said it was wiping out 3,100 headquarters jobs, including laying off 1,700 people, with most learning their fate Tuesday.
On Tuesday, the company elaborated for the first time on a plan announced last week to eliminate “several thousand” jobs, chiefly at its corporate offices in the Minneapolis area. In addition to the layoffs, Target said 1,400 open jobs will be closed and unfilled.
“Today is a very difficult day for the Target team, but we believe these are the right decisions for the company,” the company said in a statement.
On a bright, sunny morning, people carrying white boxes and personal belongings in reusable grocery bags could be seen leaving the company’s main tower.
Some people huddled in the skyways, wiping at the corners of their eyes and exchanging hugs.
Chris Webley, of Minneapolis, said he went to work Tuesday giving himself 50-50 odds of being laid off.
Target was the 27-year-old fabric engineer’s second job out of college, a “dream job” that paid in the $70,000 range. He thinks his chances of finding another position soon are good. “My expertise is a niche market,” he said. “Opportunities will be there.”
He said he isn’t eager to join another Fortune 500 company. “I vow that I won’t be part of a big company’s fate again,” Webley said.
Target said each employee who is cut will receive at least 15 weeks of pay plus additional severance amounts based on their length of time with the retailer. Target said benefits will continue for six months and employees will receive outplacement support and other services.
In a filing with securities regulators, Target said it expects severance costs of about $100 million, resulting in a charge against its first-quarter results.
The job-cutting began at the senior executive level last week, according to Target employees interviewed by the Star Tribune in recent days. One employee who declined to be identified said that probably a couple of dozen upper managers were let go Monday and gone by lunch.
Target executives announced the job cuts last week, saying they were needed to make the company a “much more agile, effective organization.”
The company, the nation’s fourth-largest retailer with about $72 billion in annual revenue, employed 13,000 at corporate offices in the Twin Cities before the job cuts, which are the largest ever in its headquarters. Including another 14,000 people at stores around Minnesota, Target is the state’s largest employer after the state and federal governments and the Mayo Clinic.
On Monday, Gov. Mark Dayton, whose father and uncles started Target in the 1960s, met with CEO Brian Cornell at the company’s headquarters. Dayton later told reporters he received an assurance from Cornell that Target was committed to Minneapolis and would keep its headquarters here.
Target endured slow sales growth over the last few years, though it remained one of the nation’s most profitable retail firms. Its stock for several months has been trading at record highs.
Executives mishandled an expansion in Canada that resulted in several billion dollars in losses over the last two years. And in late 2013, a data breach put the private information of millions of customers at risk and damaged Target’s reputation.
Cornell decided in January to end the Canada expansion, leading to job losses of 17,600 there and about 550 corporate workers in the Twin Cities who supported the Canadian business.