Can Target's 1,800 Cuts Revive a Stagnant Retail Giant?

Target Corp. (TGT) is embarking on a major restructuring effort under incoming CEO Michael Fiddelke, with plans to cut approximately 1,800 corporate roles globally—8% of its headquarters workforce—to address operational inefficiencies and stagnant sales, according to Investing.com. The move, detailed in a memo from Fiddelke, aims to eliminate "complexity" that has hindered the retailer's ability to innovate and compete, according to a Morningstar report. The reductions include 1,000 current employees and 800 open positions, primarily in managerial and U.S.-based corporate functions, according to MarketWatch.

Fiddelke, a 20-year veteran of the company, will assume leadership in February 2026, succeeding Brian Cornell. His memo emphasized that overlapping work and excessive decision-making layers have slowed Target's response to market challenges, including rising tariffs, cautious consumer spending, and competition from Walmart (WMT), the Morningstar report said. Analysts have expressed skepticism, noting the leadership change lacks a clear strategic shift and may not address broader pressures on the retailer's sales performance, MarketWatch added.

The restructuring aligns with Fiddelke's broader vision to streamline operations and reposition Target as a leader in stylish, low-cost merchandise, the Morningstar report noted. However, the scale of the cuts has raised concerns about potential disruptions to employee morale and operational continuity. The Wall Street Journal reported that Target will disclose further details about the layoffs next week, the Morningstar report said, though the company has not yet responded to requests for comment.

Financial markets reacted cautiously to the news. Shares of Target rose 0.4% in after-hours trading following the Journal's initial report, but the lack of immediate operational clarity limited broader investor enthusiasm. The move comes amid prolonged weak comparable sales, prompting investor demands for cost-cutting measures to improve profitability, according to Investing.com.

While the restructuring underscores Fiddelke's focus on operational efficiency, analysts caution that structural challenges—such as shifting consumer preferences and economic headwinds—remain unresolved, MarketWatch noted. The success of the strategy will depend on the company's ability to balance cost reductions with maintaining its competitive edge in a highly saturated retail landscape.