Target lays off 550 in Twin Cities as fallout from Canada closing

The reverberations of Target Corp.'s exodus from Canada hit home Wednesday when about 550 employees in the Twin Cities were handed pink slips, the biggest reduction at its headquarters since 2009.

While painful, the layoffs were not unexpected. The company said last month that between 500 and 600 headquarters jobs that supported the Canadian operations could be eliminated as a result of the company's decision to close all of its 133 stores in Canada, which had racked up more than $2 billion in losses in less than two years.

Wednesday's action affected about 4 percent of Target's 13,500 headquarters employees in the Twin Cities.

"With any luck, this is a temporary setback" for those workers, said Jeanne Boeh, an economics professor at Augsburg College. "If you're going to be laid off, now is a good time because jobs are picking back up."

About 350 Target employees finished work on Wednesday. Another 200 were notified that their jobs will soon end but that the company wants them to stay through the winding down of the Canadian business. Liquidation sales, which began last week, are expected to be completed by May 15.

In addition, Target said it will eliminate 170 positions at its tech operations in India, where it employs about 3,000.

"Obviously, this is a very difficult day for Target," said Katie Boylan, a company spokeswoman. "But when we think about our long-term growth and success, this tough decision is also the right decision."

The newly laid-off employees will remain on the Target payroll for at least 60 days and will receive further severance based on years with the firm. Target will pay the employer portion of their health benefits for the next six months.

The 70 American employees who were posted in Canada were not affected by Wednesday's layoffs, said Target's Boylan. The retailer is still planning to move them back to the Twin Cities while it evaluates their future with the company. "We will continue to work with them over time on a case-by-case basis," she said.

While Target is still the largest employer in downtown Minneapolis, it has been shrinking its workforce there as it has reduced positions and moved jobs to other parts of the metro area.

In recent years, it has transferred employees to its Brooklyn Park campus where about 4,000 employees now work, mostly in information technology. Target's downtown presence has dropped about 20 percent to 10,000 employees, down from about 12,582 employees a year or so ago, according to an annual survey by the Minneapolis Downtown Council.

On Tuesday, Target said it would shut down a video-on-demand service launched in 2013 called Target Ticket. The business failed to gain traction amid heavyweights such as Netflix and Amazon Prime.

Sozzi also wondered if Cornell, who took the helm in August, may be considering closing more underperforming stores. Target announced 19 store closings during the fiscal year that ended last week. "I think they need to trim the U.S. store base a little more," Sozzi said.

Cornell will meet analysts in New York on March 3, when he's expected to shed more light on his long-term strategic plan. The new leader has already shown interest in digital innovation and smaller format stores. Last week, he hired Mike McNamara, a Tesco executive, to be Target's new chief information officer. And the company's expansion plan this year for the first time calls for opening more smaller format stores than big-box stores.

In the meantime, Target is still plotting out its exit from Canada. All of Target's 17,600 employees in Canada will soon be out of jobs.

On Wednesday, a judge in Ontario Superior Court in Toronto signed off an amended plan for the sale of the retailer's 133 store leases in Canada. Landlords had objected to the original scheme. In the compromise, a court-appointed monitor will get more control over the process.

The judge has not yet ruled on a simmering disagreement between Target and the franchised pharmacists who set up shop inside of the Canadian stores and are now seeking more restitution.