In an effort to reel in more customers, Target will soon begin adding more in-store employees while reducing its workforce at distribution centers and regional offices.
CNBC reported that an e-mail sent to employees on Monday explained that Target is shifting to an in-store labor focus as it tries to improve the overall customer experience.
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Shoppers have complained about out-of-stock items, long lines and messy shelves, leading to the renewed push to spruce things up.
Layoffs and hiring
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Minneapolis-based Target has approximately 2,000 stores and more than 400,000 employees nationwide.
The new strategy will see the retailer lay off about 500 workers at regional offices and along the supply chain route.
“This change also fuels our ability to put significantly more payroll in our stores — primarily in additional labor and hours where needed most, but also in new guest experience training for every team member at every store,” an email from Adrienne Costanzo, Target’s chief stores officer, and Gretchen McCarthy, the chief supply chain and logistics officer, said.
The email did not say how many new employees will be hired in Target stores nationwide. However, starting pay will be between $15 and $24 per hour, depending on the location.
Shakeup by new CEO
This is the first major change implemented by new Target CEO Michael Fiddelke, who assumed the top job on Feb. 1. He previously was Target’s chief financial officer and chief operating officer.
He takes over as Target sales have been flat for four years and customers as well as vendors have criticized the company for losing its edge when it comes to customer service and trendy merchandise. The company slashed 1,800 corporate jobs last October, or 8% of its corporate workforce.
“Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life,” Fiddelke said at the time.
Target has faced economic headwinds in recent months as customers have focused on purchasing necessities such as groceries and gasoline while eschewing impulse buys and discretionary spending.
The company is expected to announce its holiday-quarter sales results on March 3.
The Commerce Department reported on Tuesday that retail sales for the December holiday shopping season were unchanged or flat nationally. Analysts had predicted a .3% increase.
