Target lays off 80 in property development

Target Corp. on Wednesday laid off 80 employees in the property development unit at its Minneapolis headquarters, a move that reflects its slower pace of opening big-box stores.

In addition to the layoffs, another 40 open positions at Target will not be filled, said Molly Snyder, a company spokeswoman.

"We routinely evaluate our business to ensure we are positioned for profitable growth," Snyder said in a statement. "As we open fewer general merchandise stores nationwide and focus more on smaller formats, we have made the decision to centralize our architecture, construction, engineering and facilities management teams to best meet the needs of the business going forward."

At the same time, Target has been toiling to boost its disappointing performance with flat or lower sales in four of the last six quarters.

In recent years, Target remodeled nearly 1,300 of its 1,800 U.S. stores. It added an expanded grocery selection to many of them, a move that became known to investors as "P-Fresh remodels."

Target opened 19 new stores in the U.S. last year and 23 in 2012, according to its most recent annual report. By comparison, it was adding around 85 stores a year from 2005 to 2009.

Executives now have become more interested in exploring new smaller formats known as CityTarget and TargetExpress in urban areas that don't have room for the big box stores found in suburbs.

Target is also experimenting with a 20,000 square-foot format known as TargetExpress. The first one opened earlier this year in Dinkytown by the University of Minnesota. And Target has already announced five more locations to open next year in St. Paul, San Diego, and three in the San Francisco Bay Area.

In May, John Griffith retired as Target's executive vice president of property development after overseeing its rapid expansion in the past 15 years. Analysts noted then that the U.S. was already fairly saturated with big-box stores, leaving Target with fewer opportunities to add big suburban stores.
Target's larger rival, Wal-Mart Stores Inc., is in the same boat. Its executives told investors earlier this month that they would slow its growth of new supercenters next year as they turn their attention more to smaller format stores.

Snyder said the affected Target employees, some of whom worked out in the field, will remain on the payroll for 45 days and receive severance packages.

Target has about 14,000 corporate employees in Minnesota, including about 11,000 who work at its headquarters on Nicollet Mall.

This round of layoffs is smaller than one in January, when approximately 475 employees were given pink slips in Target's largest layoff in four years. At that time, Target also said it would not fill 700 open positions.