MW Target might be cutting jobs, but its 'kitchen sink' moment hasn't hit yet

By Bill Peters

Management is looking for 'quick wins to buy time,' business professor says. Molson, Amazon, Meta and GM are also trimming staff

The Wall Street Journal on Thursday reported that Target planned to lay off around 1,000 global corporate employees and eliminate 800 open positions.

Wall Street analysts suggested the worst was still yet to come for Target Corp., after the big-box chain this week reportedly said it planned to cut around 8% of its corporate staff in the wake of faltering sales.

"We expect more restructuring activity to take shape in coming months - potentially post the peak holiday period - opening up re-investment opportunities for a struggling, yet potentially fixable business," Mizuho analyst David Bellinger said in emailed commentary on Friday.

"Shares are trading at very depressed levels," he added. "Downside to estimates remains. Above all, we caution investors that the business has not yet had its 'kitchen sink' moment."

Bellinger said there was still a lot to like about Target (TGT) - such as its private brands, growing marketplace platform, and exclusive items, like those related to Taylor Swift's latest album. But he said the job cuts were the first of many tough decisions.

Those decisions will be made as Michael Fiddelke, a 20-year Target veteran, prepares to step into the chief executive role on Feb. 1, succeeding Brian Cornell. When Target announced the leadership change in August, some analysts said they'd hoped the company would have acted more boldly in choosing a new CEO.

Still, KeyBanc analyst Bradley Thomas, in a note on Thursday, said the job cuts showed Fiddelke was "working with a sense of urgency."

He also said the cuts "may be a sign of ongoing weakness in discretionary categories, market share losses, and the need to reinvest in other areas of the business."

The Wall Street Journal on Thursday reported that Target planned to lay off around 1,000 corporate employees and eliminate 800 open positions. In a memo to employees, Fiddelke said he was trying to clear up "complexity" that gummed up decision-making and made it harder to deliver on ideas, according to the Journal. CNBC said said the layoffs were the biggest for the retailer in a decade.

"Reducing complexity is code for eliminating existing initiatives that haven't worked out as planned, reallocating some of the savings to new initiatives, and allowing some savings to flow to the bottom line," Jason Schloetzer, a business professor at Georgetown University, told MarketWatch.

"Management is looking for quick wins to buy time for ideas that may take some time to generate profits," he added.

Target isn't the only company trimming staff, as corporate America tries to protect profits and navigate unease about an economy under pressure from tariffs and rising costs of living.

Beer brewer Molson Coors Beverage Co. $(TAP)$, which also recently got a new CEO, on Monday said it planned to cut around 9% of salaried staff in its Americas division by the end of the year. Axios on Wednesday reported that Meta Platforms Inc. (META) would cut several hundred jobs in its artificial-intelligence segment.

Elsewhere, General Motors Co. $(GM)$ on Friday laid off more than 200 salaried workers, CNBC said. Fortune reported this month that Amazon.com Inc. is planning to make cuts in its human resources department.

For years, Target was known for its sense of style and affordability - or its "Tar-jay" sensibility. But over the past few years, the retailer has struggled to keep up with Walmart Inc. $(WMT)$, which sells more higher-priority basics and has done a better job drawing customers looking for a bargain.

Amazon (AMZN) and Costco Wholesale Corp. $(COST)$ have also picked away at Target's business. Shares of Target are down more than 30% so far this year. One analyst said Target appeared to be going through an "identity crisis."

Fiddelke, during Target's earnings call in August, said Target needed to regain relevance in style and design. Management at that time also detailed its efforts to refresh its assortment and the aesthetics of its so-called "hardlines" products - or things like electronics and furniture. Those efforts helped sales for things like trading cards, headphones and items like the Nintendo Switch 2.

Truist analyst Scot Ciccarelli, in a research note on Thursday on Target's layoffs, estimated that the savings from the cuts could come in at around $90 million to $100 million. Based on a perusal of Glassdoor and Salary.com, he said, the average corporate Target salary ran at about $90,000 to $100,000 a year.

But he said Target still had "LOTS of wood to chop," and said investment spending at the company needed to pick up the pace.

"The elimination of these roles could potentially streamline processesand improve efficiency," Ciccarelli said. "However . . . we think the company needs to invest more in the business, not less."

-Bill Peters

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October 26, 2025 09:30 ET (13:30 GMT)

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