Archived Target to cut thousands of jobs in restructuring

[desertcoyote]

From CNBC: http://www.cnbc.com/id/102473872

Target to cut thousands of jobs in restructuring

Brian Cornell, Target's chief executive, said Tuesday the company will cut several thousand jobs within the next two years as part of a $2 billion cost savings plan.

Target also announced its guidance for 2015 of $4.45 to $4.65 adjusted earnings per share. Wall Street expected the retailer guidance at $4.50 adjusted earnings per share.

The retailer also expects digital sales to grow 40 percent and comps growth between 1.5 percent and 2.5 percent, with modest improvement in gross margins and expense rates. It also expects sales to grow between 2 and 3 percent during the year.

The company's stock closed at $78.02, or 0.44 percent up. (Click hereto see what the stock is doing now).

Read MoreWhat's driving our turnaround: Target CFO

Regarding 2016, Target expects earnings per share to grow at a 10 percent yearly rate and a 5 to 10 percent dividend growth rate.

—Courtney Reagan contributed to this report.

 

[desertcoyote]

So now the question is where are these jobs getting cut? Corporate level, STLs, ETLs, SrTLs or TMs or maybe customer service 800 numbers? Maybe it will be done through attrition at the store level?

 

[Retail Girl]

They are running out of positions to cut at store level. Guests are already unhappy with no one on the sales floor and long lines. Just how much more can they cut at the store level without us losing even more guests?

 

[desertcoyote]

Oh I agree. I work Service Desk and I hear that complaint all the time. Usually while I'm ringing up another guest.

 

[RetailWorld]

It's gotta be at the DTL and up level. I honestly can't see how they can trim store-level positions anymore.

 

[POGguy]

10,000 employees at HQ. That's where most of the cuts come from in my opinion.

 

[RXninja]

Well, looking at how he decided to shutter Canada. I am thinking he is planning on a lot of store closures in the U.S.A.

 

[Hardlinesmaster]

The story didn't mention Canada. Also, this is similar to the article in December.
From another thread.
Canadian boondoggle gets HQ employees fired also.

With AP headlines reading "Hundreds of Target Employees laid off in Twin Cities" the news Wed 2/11/15 is that 350 of the 10,000 HQ employees are gone immediately with another 200 to go when the Canadian screw up over 133 stores to be closed is finally finished this May. In addition to the Mn. firings, the Target operation in India is also laying off 170 employees

The US employees will be paid for at least 60 days and severance packages will be given based on years of service.

See also: http://targetfiling.blogspot.com/ and
http://www.wsaw.com/home/headlines/...loyees-laid-off-in-Twin-Cities-291534671.html

 

[BckRmBeast]

I can see ETLS being consolidated or STLS being made to run two stores. Closing ultra low volume stores is another option. Anyone know if the ultra lows are even profitable for the company? They need to bring back the Food BP or give that the the DTL.

 

[BckRmBeast]

Another option is actually making team members full time at 40 hours but I think I'll see pigs fly before that happens.

 

[POGguy]

Stores that are unprofitable are closed. The question is how profitable does a store have to be for them to keep it open. What's the trend in sales the past 5, 10 years for that store. How risky a store is from a theft standpoint.

All are factors.

 

[Nowolf]

we were told it would be corporate level and done over 2 years. they plan to cut costs on stores and supply chain (supply chain more so), to invest in mobile/online. ship from store will become a huge push, 350+ stores will get the feature this year.

overall, everything new sounds like its in a testing phase. in that way i expect to see the company move slower with roll outs. the biggest question marks they arent giving any feedback on, how they want total guest obsession in store from team members. no word on what they will do with pay, nor how they accomplish that with minimal head count.

this is why they like smaller store formats going forward. you live on thin razors and minimal head count isn't a problem when your focusing on a store that serves less guests. they view it as a profit win.

also, the messaging from the meeting of asking the "team" to put enterprise (target) ahead of team is a bit telling of the changes they plan.

 

[Hardlinesmaster]

Welcome, @Nowolf ! Thanks for the MN corp update.

 

[BckRmBeast]

So while Amazon is moving into the brick and mortar space, it seems Spot will be trying to abandon brick and mortar on a test phase? I.E. close stores in areas where they were going 1 to 1 with Wal-Mart that are over saturated or just remodel these stores into a smaller guest footprint?

we were told it would be corporate level and done over 2 years. they plan to cut costs on stores and supply chain (supply chain more so), to invest in mobile/online. ship from store will become a huge push, 350+ stores will get the feature this year.

overall, everything new sounds like its in a testing phase. in that way i expect to see the company move slower with roll outs. the biggest question marks they arent giving any feedback on, how they want total guest obsession in store from team members. no word on what they will do with pay, nor how they accomplish that with minimal head count.

this is why they like smaller store formats going forward. you live on thin razors and minimal head count isn't a problem when your focusing on a store that serves less guests. they view it as a profit win.

also, the messaging from the meeting of asking the "team" to put enterprise (target) ahead of team is a bit telling of the changes they plan.

 

[commiecorvus]

Welcome to The Break Room @Nowolf
Thank you for the information.

 

[trowa03]

Two SVP jobs got cut, and merged. Maybe a bit of foreshadowing for the rest to come?

SVP list
Before = 52 SVP
http://webcache.googleusercontent.com/search?q=cache:x2WymT3hux0Jressroom.target.com/leadership &cd=1&hl=en&ct=clnk&gl=us

After = 50 SVP
http://pressroom.target.com/leadership

we were told it would be corporate level and done over 2 years. they plan to cut costs on stores and supply chain (supply chain more so), to invest in mobile/online. ship from store will become a huge push, 350+ stores will get the feature this year.

I like how they left that tid bit about supply chain out... for those of us in supply chain. Oh well writings been on the wall for awhile.

 

[RedMan]

I read a letter today stating that cuts would be made at Corporate and that there would be process changes. It was noted that some of our processes were much harder that they have to be and there would be progress made on streamlining processes.

 

[chaiknees]

Here's Bloomberg's take:

http://www.bloomberg.com/news/artic...ecast-tops-estimates-as-ceo-outlines-strategy

"To boost sales, special attention will be paid to improving Target’s baby, kids, wellness and grocery sections, Cornell said. The grocery revamp will entail improving assortments of granola, yogurt, candy, snacks, coffee and craft beers. Target also will accelerate the opening of smaller-format locations to cater to city-dwellers."

So, more CityTargets and upscaling the product mix?

 

[Mhugh220]

If not corporate level jobs then I'd think closing a few stores. Org charts are sparse. Although I'd cut ETL-HR and have BPs take over with HR-TLs gaining a few extra $$ and added responsibilities. But overall don't cut store level positions.

 

[BckRmBeast]

That is still quite a large number of SVPs. I'm shocked that there are more than 20.

 

[TeamRed]

Not to go off topic but I was reading spot wants to have more organic products, of course the craft beers Target wants to go all whole foods don't they lol. Not that there is anything wrong with that.......

 

[OhYouDidntKnow]

I read a letter today stating that cuts would be made at Corporate and that there would be process changes. It was noted that some of our processes were much harder that they have to be and there would be progress made on streamlining processes.

Viper.

 

[Nowolf]

thanks for the welcome(s)!

Not to go off topic but I was reading spot wants to have more organic products, of course the craft beers Target wants to go all whole foods don't they lol. Not that there is anything wrong with that.......

it makes sense, grocery is a loser on profit. selling specialized or "high end"/visually marketable product will help profit margin. also, attracting guests with fatter wallets through the store. the question is how does this appeal to suburban targets or super targets that heavily rely on food traffic; the idea of being a normal market (price friendly). biggest thing to watch for is how we adapt to being local to our guest needs. the market experience outlined today won't work for all targets.

 

[Guest]

If Target wants to make more money, keep the fuckin' shelves stocked. You do that by making all stores overnight flow and overnight FDC. Flow should start as soon as the store closes. FDC should start at close too. And stop all this every other day there is an FDC truck bullshit. Have set days each week like it used to be. And also train people properly on how to work it and stock it.

 

[Brewhaha]

If Target wants to make more money, keep the fuckin' shelves stocked. You do that by making all stores overnight flow and overnight FDC. Flow should start as soon as the store closes. FDC should start at close too. And stop all this every other day there is an FDC truck bullshit. Have set days each week like it used to be. And also train people properly on how to work it and stock it.

I couldnt agree with you more. There excuse will be it will cost too much to pay people for over night and cost too much to keep the stores essentials going when they dont "need" to do it.