By saying little about cuts, Target heightens uncertainty for thousands

When the ax fell at Target Corp., no one actually swung it.

The news that several thousand workers at Target's corporate offices in Minneapolis will lose their jobs emerged in the next-to-last paragraph of a statement handed to reporters covering a presentation executives made to financial analysts Tuesday in New York.

Just as those reporters started tweeting and posting Web alerts, Target employees got an e-mail from Chief Executive Brian Cornell that described the initiatives he and other executives were presenting to analysts. In the next-to-last paragraph, it mentioned job eliminations at headquarters, though without any mention of how many.

Vagueness is common at companies that undergo massive downsizing, analysts said Wednesday. Corporate leaders try to preserve flexibility, defer difficult decisions and avoid unpleasant discussions for as long as possible.

But a successful corporate transformation involves enormous communications work, empathy and even psychological resources, they said.

"A lack of information breeds uncertainty," said John Budd, industrial relations chair at the Carlson School of Management at the University of Minnesota. "Alleviating uncertainty requires open communication and high levels of transparency."

As the news spread Tuesday, Cornell and other executives were still on stage taking questions from analysts. No one brought up the number of people being affected by the cuts, part of a $2 billion cost-reduction program. When an analyst asked how Target can minimize the friction and distraction of downsizing, Cornell said he appointed a senior executive to lead it. "We recognize it is a time of significant change," he said.

It's massive. The term "several thousand" suggests at least 2,000 and perhaps as many as 5,000 or 6,000 Target corporate workers are at risk. That's a big share of the 13,000 corporate employees in the Twin Cities.

However, the announcement also left workers guessing about timing — and their own vulnerability.

"When they're not specific, people use their imagination and start filling in the blanks. That's not necessarily a good thing," said James Quick, a professor of leadership and organizational behavior at the University of Texas-Arlington.

Leaders at downsizing companies fare best when they show they care about what's happening to those who are losing their jobs, he added. "People recognize reality. They can deal with reality," Quick said. "What they can't deal with is a lack of integrity and forthrightness."

Target said the cuts will begin this quarter, and it will take a charge against results to pay for severance and other downsizing costs. The cuts won't happen all at once, however, and the company is unlikely to publicly announce every phase of the reduction.

Minnesota Gov. Mark Dayton, whose family started Target but hasn't run it since the early 1980s, told reporters at the Capitol Wednesday that he was surprised by the move and wasn't informed by Target ahead of the announcement.

"Obviously the decision has been made, but I'm very concerned about the people who are going to be laid off," Dayton said. "Fortunately we have a good job market right now in Minnesota, but it's still going to be a serious disruption for them and for their families."

Dayton blamed "mistakes and failures of previous Target management" and said he thinks the decision to scale back could have been handled differently. Dayton said he would seek a meeting with Cornell, noting that, with about 27,000 people including store employees, Target is Minnesota's largest employer after the state and federal governments and Mayo Clinic. "I hope he's cognizant of that," Dayton said. "I intend to find that out for myself."

Snyder said Target "looks forward" to meeting with Dayton and other officials. She said the company will continue to "hire for key areas and look for people with the specialized capabilities that we will need to support our strategy."

Sean Naughton, an analyst at Piper Jaffray & Co. in Minneapolis, said he was surprised by the size of the layoffs, especially since Target has already been trimming hundreds of employees in recent years.

Staff writer Patrick Condon contributed to this report.