The cut amounts to 1% of corporate employees. Target and other retailers have said they aren’t as optimistic about the rest of the year.
Target Corp. on Wednesday laid off about 150 of its 15,000 Twin Cities corporate employees as executives tackled inefficiencies at a time of growing uncertainty about shoppers’ behavior.
Many retailers, including Target, have lowered their financial expectations for the rest of the year, citing a tougher-than-expected spending environment. Target said last month that it would employ fewer seasonal workers over the holidays than it did last year, about 70,000 now compared with 88,000 during the 2012 holiday season.
Target spokeswoman Amy Reilly said the layoffs were partly due to “our future model not supporting the current size of the team,” as well as to eliminating duplication of responsibilities and less cost-effective operations.
Those laid off will remain on the payroll for 45 days, Reilly said.
Target is one of the nation’s largest retailers, with $73 billion in annual sales and 360,000 employees. But it is sharing the plight of many other retail giants: slowed economic growth and lots of uncertainty.
“It’s a general retail problem, and it’s very broad,” said Stan Pohmer, a Twin Cities retail consultant. “The economy isn’t growing the rate retailers would like and that everybody was talking about a short while ago. And there’s the impact of the government shutdown. No one knows how long-term the shutdown will be, or if government workers will get retroactive back pay for the shutdown period. There’s a lot of uncertainty out there.”
Holiday sales at U.S. retail chains are projected to rise 2.4 percent this year, the smallest gain since 2009, according to a September report from ShopperTrak, a Chicago-based firm. The National Retail Federation this month projected a 3.9 percent sales increase during the holiday season, slightly better than last year’s 3.5 percent gain, but cautioned that a continuing Washington standoff over the U.S. budget and the national debt could jeopardize that.
Steve Alexander • 612-673-4553