Target confirmed a massive round of layoffs took effect Tuesday morning. Approximately 1,700 jobs have been cut, with most of the layoffs coming from the Minneapolis headquarters. Target also "permanently closed" 1,400 open positions.
The severance package
A Target Corp. filing with the SEC, signed by chief financial officer John Mulligan, estimates the severance packages will cost the company $100 million. The severance packages include 15 weeks of pay, additional severance pay based on years of service, 6 months of benefits coverage, career outplacement support, and free executive education courses.Internal email sent to Target employees
from Jodee Kozlak, EVP and Chief HR Officer
As you know, we're making significant organizational changes. And this morning, difficult conversations are taking place across many teams, resulting in the departure of 1,700 of our colleagues, in addition to the 1,400 open positions we've eliminated over the past few months.
Because these are our friends and peers, I know many of you are wondering what Target is doing to help make this transition easier for them. They will receive a comprehensive separation package that includes more than 15 weeks of pay plus additional severance based on their years of service. They'll also receive six months of benefits coverage at the Target team member rate, outplacement support and access to free executive education courses.
It's difficult to say goodbye to people we care about. And then find out your boss has changed, or you have a new team, or your role is changing. All these changes are happening simultaneously, which is a lot to absorb all at once. It will require a new level of leadership, creativity and accountability from all of us.
We all have a role to play in shaping the new normal and redefining what it means to work at Target HQ – and what it means to be part of a transformational growth company. You'll hear more about our plans for growth from Brian Cornell at a team gathering in Target Hall next week.
While difficult, transformation demands the very best we all have to give – to ourselves, to each other and to this incredible company.
'It's crazy' at Target HQ
Target employees informed of layoffs via morning meeting appearing on calendar. Packing supplies, boxes provided. #targetlayoffs— Ted Haller (@TedHallerFox9) March 10, 2015
Target Corp. statement (3/10)
Throughout Target's comprehensive strategic review of our business, we have continued to ask tough questions and, sometimes, the answers to those questions mean we have to make equally tough decisions. We know that to compete in this evolving retail environment, we must simplify how we work. We must reduce complexity and act with a greater sense of urgency.
We have previously shared that there would be headcount reductions. And today, we informed our team that we are eliminating approximately 1,700 positions, primarily from our headquarters locations. In addition, we permanently closed 1,400 open positions. While today's news is difficult, it's important to know that we will continue to make investments in our business and team -- particularly in areas such as digital, personalization, data and analytics, and engineering -- to position Target for future success.
Our goal is to treat all affected team members with the respect they deserve. Therefore, Target will provide each individual with a comprehensive package including more than 15 weeks of pay plus additional severance based on years of service. Target will also provide each team member with career outplacement support, access to free executive education courses, and will pay the employer portion of their benefits coverage for the next six months. Today is a very difficult day for the Target team, but we believe these are the right decisions for the company.
Governor, CEO meet face-to-face
Minnesota Gov. Mark Dayton was upset that he didn't get an advance warning about the layoffs, and scheduled a face-to-face meeting with Target CEO Brian Cornell on Monday.
"I asked for assurance that they were committed to Minnesota and to Minneapolis," Dayton said. "I got strong reassurance that that was their intent and was the case."
Cornell announced the personal decision to layoff thousands of workers at the Minneapolis headquarters while in New York City. Back in Minneapolis to face the reality of his decision, University of St. Thomas business professor Michael Porter says it's important Cornell and his deputies remain clear and compassionate.
"Is this how you would tell your mother?" Porter said. "If you are transparent and honest and genuine about it, it's hard to go wrong."