Target, the iconic American retailer once affectionately nicknamed “Tarzhay” for its stylish-yet-affordable appeal, is making its biggest corporate shake-up in a decade. On October 23, 2025, the company announced it would eliminate about 1,800 corporate jobs—a move designed to simplify operations and help the company regain its competitive edge after years of sluggish sales and a falling stock price. The layoffs, representing roughly 8% of Target’s global corporate workforce, will be felt most acutely at the company’s Minneapolis headquarters, according to Reuters and BBC.
Incoming CEO Michael Fiddelke, currently Target’s Chief Operating Officer and a 20-year veteran of the company, delivered the news in a memo to employees. He’s set to officially take the reins from longtime leader Brian Cornell on February 1, 2026. Fiddelke didn’t mince words about the reasons behind the cuts. “The truth is, the complexity we’ve created over time has been holding us back. Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life,” he wrote, as quoted by AP News and Reuters.
The company plans to notify about 1,000 employees of their layoffs next week, while another 800 vacant corporate positions will be eliminated, a company spokesperson confirmed. Fiddelke also asked employees at the Minneapolis offices to work from home during the week of October 27, 2025, as further details about the restructuring are rolled out. For those losing their jobs, Target has promised pay and benefits through January 3, 2026, along with severance packages—an update clarified by AP News after an initial error in the end date.
Importantly, these layoffs will not impact the nearly 2,000 Target stores across the United States or the employees working in the company’s sorting, distribution, and supply chain facilities. The cuts are focused on corporate management layers, with managers expected to be among those most affected, as noted by Reuters.
Why now? Target’s decision comes after four years of flat or declining comparable sales. The retailer has reported such disappointing figures in nine of the past eleven quarters, including a 1.9% dip in comparable sales during the second quarter of 2025 and a 21% drop in net income, according to AP News. The company’s share price has also taken a beating—down about 30% in 2025 alone, and a staggering 61% since its 2021 peak, as reported by GuruFocus. Meanwhile, chief rival Walmart’s stock has climbed nearly 18% this year, further underscoring Target’s struggles.
Several factors have contributed to Target’s woes. Inflation has squeezed consumers’ wallets, leading many to cut back on non-essential spending—a category that makes up about half of Target’s sales, according to BBC. Shoppers have also complained about messy stores and merchandise that fails to deliver on the “affordable chic” promise that once set Target apart. Inventory management issues and backlash over the company’s handling of diversity, equity, and inclusion (DEI) policies have added to the headwinds.
Fiddelke, who was named chief executive in August, has made it clear that he sees the need for urgent change. When his appointment was announced, he emphasized three priorities: reclaiming Target’s leadership in merchandise selection and display, improving the customer experience by ensuring clean stores and stocked shelves, and investing in technology. “Adjusting our structure is one part of the work ahead of us. It will also require new behaviors and sharper priorities that strengthen our retail leadership in style and design and enable faster execution,” he wrote in his message to employees, as cited by AP News and BBC.
Jefferies analyst Corey Tarlowe described the layoffs as “painful but necessary,” telling GuruFocus and CNBC that the move signals Fiddelke’s readiness to act boldly after years of weak performance. Tarlowe added that the plan is a positive step for long-term investors, though he cautioned that sales need to recover visibly before investor confidence returns in earnest. Jefferies has maintained a “Buy” rating on Target’s stock, but acknowledged that soft consumer demand and leadership changes could weigh on short-term results.
Target’s next big test comes soon: the company is set to report its third-quarter earnings on November 19, 2025. Analysts are projecting $25.4 billion in revenue and earnings per share of $1.76, according to GuruFocus. Investors and industry watchers will be looking for signs that the restructuring is beginning to pay off, especially as the crucial holiday shopping season approaches.
In the meantime, Fiddelke is not just focused on cost-cutting. He has pledged to improve the quality of Target’s products and embed more technology into the business. Recent product launches, like the $8 Woolrich x Target Ceramic Birds Mug—a nod to the retailer’s heritage of affordable, vintage-inspired design—show the company’s ongoing efforts to recapture its unique niche.
Still, the path ahead is anything but certain. Target’s challenges are not solely the result of broader economic trends. The retailer has faced company-specific missteps, such as inventory problems and a controversial decision to end DEI targets, which sparked backlash from some customers. The company’s leadership is betting that a leaner corporate structure, paired with renewed focus on merchandise and customer experience, will help it regain its footing.
For the thousands of Target employees affected by the layoffs, the news is undoubtedly a blow. But for investors and retail industry observers, the move is seen as a bold—if risky—attempt to reset the company’s trajectory. As Fiddelke prepares to step into the CEO role, he faces the daunting task of restoring Target’s reputation as a leader in affordable style and innovation, while navigating a rapidly changing retail landscape.
Whether this restructuring will be enough to bring Target back to its former glory remains to be seen. But one thing is clear: the company is betting big on change, and all eyes will be on its next steps as it seeks to win back both customers and Wall Street’s confidence.
