Target Corp on Tuesday said that it is laying off 1,700 workers and eliminating another 1,400 unfilled positions as part of a restructuring plan aimed at saving US$2 billion over the next two years.
The company said the cuts would fall primarily on its Minneapolis headquarters. The layoffs would amount to about 12 percent of the 13,500 workers there.
“Today is a very difficult day for the Target team, but we believe these are the right decisions for the company,” Target said in a statement.
Target chief executive officer Brian Cornell has said the company needs to become more nimble and innovative. His plan calls for spending up to US$2.2 billion on capital expenditure this fiscal year.
About half that would go toward technology as Target seeks to grow online sales in an era when more shoppers than ever are using mobile devices.
Earlier this year Target said it would end its foray into Canada, closing all 133 of its stores there and laying off about 17,000 workers.
The company is eliminating some jobs at a location in Bangalore, India, where Target has about 3,000 employees. However, the concentration of layoffs in Minneapolis has spurred concern about the effect on the regional economy and even some fretting about the company’s future.
Target and other retailers have seen their customer traffic decrease as consumers do more shopping online instead of at physical stores.
Target last month cut its free-shipping minimum in half, saying users who orders merchandise worth US$25 or more online would not have to pay for shipping. The move was intended to help Target keep pace with competitors like Amazon.com Inc, Google Inc and eBay Inc.
Target on Tuesday said that each employee being laid off would get at least 15 weeks of severance pay.
Target had 366,000 employees as of Feb. 1 last year. That number does not reflect the layoffs in Canada and an updated figure was not immediately available.
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