Target Corp, announced a reorganization of its downtown Minneapolis headquarters-based marketing organization today that results in the elimination of about 85 positions.
The move represents about 8 percent of the total marketing organization and about 0.5 percent of the downtown Minneapolis headcount, according to Kari Thompson, director of communications for Target.
The company employs about 350,000 people across all its locations.
Thompson would not quantify the cost of the restructuring nor the anticipated savings. “This was not done to cut costs. It was done to evolve our world-class marketing function,” she added.
“As a part of our normal business practices, Target routinely evaluates all areas of the company to ensure our organizational structure is effective, efficient and nimble, and that our staffing levels meet the changing needs of our business,” the company said in a prepared statement.
Affected employees “will continue to receive their full pay and benefits through December 14, after which they will receive a comprehensive separation package based on their years of service,” the company said. “As part of that package, Target also will provide these employees with 12 months of continued Target health care benefits in addition to 12 months COBRA benefit, and outplacement support to assist them in transitioning to their next position.”
Thompson said there were no additional marketing program expense cuts and indicated that the reorganization resulted in specific functions being reduced or eliminated, but she declined to offer more details. Target had recently announced aggressive price cuts up to 50 percent on select toys through the holiday season, and its annual Black Friday sale, beginning the Friday after Thanksgiving at 5 a.m., is promoted on the company website as a two-day sale with “our lowest prices ever.”
The company earlier this month had indicated that net retail sales for the five week period ending Oct. 3 had grown 1.3 percent versus a year ago sales, but comparable year-over-year same-store sales declined 1.7 percent for the month of September. The company projected it would exceed Wall Street estimates of $0.43 earnings per share for the third quarter ending Oct. 31 as a result of better-than-expected retail segment profitability and the strong September sales trend.
However, the company remained “cautious” on the fourth quarter, according to a company statement. Thompson declined to comment on the outlook for the holiday shopping season.