Minneapolis Target said late Tuesday it will reduce the work force at its headquarters locations by about 9%, including approximately 600 employees and 400 open positions. The majority of the cuts are concentrated in the Minneapolis-St. Paul area and were effective Tuesday.
“We are clearly operating in an unprecedented economic environment that requires us to make some extremely difficult decisions to ensure Target remains competitive over the long-term,” said Gregg Steinhafel, president and CEO, Target Corp.
The chain will also close its distribution center in Little Rock, Ark. which employs 500 people later this year. Target has implemented other steps to reduce expenses such as eliminating salary increases for senior management and suspending share-repurchase activity. As a result of these measures, the company expects to record a charge of about 3 cents a share, mostly in the fourth quarter.
Headquarters employees affected by the announcement will continue to receive their full pay and benefits through April 1, after which they will receive a comprehensive separation package based on their years of service. As part of that package, Target also will provide these employees with 12 months of continued Target healthcare benefits in addition to 12 months of the COBRA benefit, and outplacement support to assist them in transitioning to their next position.
Little Rock DC employees will be offered positions at other Target DCs, or will receive comparable severance.