Target Chairman and CEO Greg Steinhafel went to great lengths this week to reassure 2,100 Target India employees that the retail giant is committed to its Target India operation. In fact he went nearly 8,400 miles, flying all the way to Bangalore to appear at the Target India Annual Day where Target’s newest and largest building in India, was renamed the Gregg W. Steinhafel Center.
While not without precedent (another building in India is named for former chairman Robert Ulrich), the symbolic renaming of the building formerly known as C2, completed in February 2009, is the second highly visible move by Target in recent months to emphasize its “long term commitment” to its Indian operation, which represents less than 1 percent of its mostly U.S.-employee base of 350,000.
Developments in India underscore the importance with which Target views the operation, initially launched in 2005 as a remote IT (information technology) unit writing software for the retail operation. Today Target describes its India operation as “an extension of corporate headquarters,” according to spokesperson Beth Hanson. Hanson said the operation supports all the businesses and such diverse operations as financial services, marketing, property development and product design.
For a company like Target, having a headquarters operation halfway around the globe extends the workday round-the-clock and takes advantage of a highly educated English speaking workforce at lower cost than U.S. workers. It also adds cultural depth to a company with an overwhelmingly U.S. retail base, upper-Midwest roots and global aspirations. Target has no current plans to open any retail operations in India, according to Hanson.
Target had reduced its Nicollet Mall headquarters staff last year, presumably adding to uncertainty throughout the company. Target’s Bangalore operation had also been the subject of recurring rumors in the Indian press that it was on the block to be sold to a local Indian software company, prompting the Minneapolis-based retail giant to take the unusual step of publicly and vigorously denying the rumor in two separate press releases.
In a prepared statement, Lalit Ahuja, Target India P\president, said: “The renaming of this facility underscores Target’s commitment to our operations in India and the efforts to further integrate our India and U.S.-based teams. The 2,100 members of the Target India team continue to deliver exceptional results in direct support of Target’s companywide strategy and growth priorities.”
Target India is an integral part of Target’s long-term business strategy and growth and will continue to provide value in 2010 by driving superior execution, enhancing business capabilities and strategically collaborating with the U.S-based team, the statement concluded.
How in the world does it add cultural depth? They didn’t choose India for the curry. It’s outsourcing, plain and simple. You even mention that in the article. This takes jobs away from Americans.
Still think Target is a local company? That’s getting to be a pretty big Minnesota cliche.
So glad Steinhafel, this great American capitalist, is so committed to saving jobs in India. His successor I’m sure will have a named building in Vietnam or the Phillipines.