Inside Target’s 500 Job Decision | Fast Five shorts
This Omni Talk Retail Fast Five segment, sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, Quorso, and Veloq, examines Target’s decision to cut 500 roles while increasing investment in frontline store staffing.
Chris Walton and Anne Mezzenga, alongside Shoptalk’s Joe Laszlo, break down the labor math behind the move and debate whether this represents meaningful operational change or a strategic reset.
⏩ Tune in for the full episode here.
#Target #RetailLabor #StoreOperations #RetailStrategy #OmniTalk
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Transcript
Target is cutting about 500 rolls at distribution centers and regional offices while simultaneously investing more money into frontline store staffing to improve customer experience, according to CNBC.
Speaker A:Again, Target is eliminating around 100 positions at the store district level and about 400 across its supply chain site while redirecting those resources to add more hours for frontline store employees.
Speaker A:The big box retailer said it's making changes to the way it runs an overseas store stores to improve the customer experience, a top goal of new CEO Michael Fidelke, who took over on February 1.
Speaker A:Target is reducing the number of store districts to streamline operations and putting money toward additional labor hours and new guest experience training for every team member at every store.
Speaker A:Joe, I'm curious, how meaningful do you think Target's announcement to invest more in store staffing actually is?
Speaker B:Well, I certainly think it's addressing the thing that comes up the most when people critique Target's current performance guest experience.
Speaker B:What's causing the most problems with people who used to love Target but maybe don't shop there as often anymore or kind of used to go to Target because they wanted to and now kind of only go when they need to.
Speaker B:I think improving that frontline experience, just having more bodies in stores because that's a thing that robots can't do yet, can only help.
Speaker B:But I think the, the proof is certainly going to be in the execution of that.
Speaker B:So I think, I think, I guess I would say they're, they're saying the right thing, but we're going to have to see how that manifests.
Speaker B:It's also not the kind of thing you can change overnight, especially not with a store fleet as big as theirs is.
Speaker B:And so, so it's going to be a, a big gap between kind of, kind of saying the right thing now and, and having it come to reality, you know, three months from now, probably at the soonest.
Speaker A:So, Joe, if I read between the lines.
Speaker A:So you're a little skeptical of the impact of this announcement?
Speaker A:A little bit.
Speaker A:There's a little skepticism that you're viewing.
Speaker B:This announcement with, I guess, I guess a little bit.
Speaker B:And also like kind of there needs to be some expectation setting just around like it's not going to be an overnight.
Speaker B:Suddenly the shelves will be stocked with everything that people want to buy and it'll be a back to the, the Target in store experience that we were all used to say five years ago.
Speaker B:I think they're going to need to temper expectations about just how fast they can execute on what they're talking about.
Speaker A:Today, especially amongst the leadership changes they just announced too.
Speaker A:They've got a lot of things to sort out internally now as well.
Speaker A:Yeah, I mean, I'll go a little heavier handed on this.
Speaker A:I don't think this is going to surprise anybody, but I think it's backed up by the math.
Speaker A:So I think, I think it's smoke and mirrors as a PR announcement and they're the.
Speaker A:And it's smoking mirrors from the master of PR smoke and mirrors, which is Target said you do the math on this.
Speaker A:The article states very clearly that the average pay rate starts, starts at $15 an hour.
Speaker A:So annually that's $31,000 a year.
Speaker A:The average position eliminated.
Speaker A:On the high side, on the high side is $200,000 per year.
Speaker A:So that's basically an additional six and a half people for each eliminated position, which equates to, best case, an additional 3,225 workers, which, which is less than one extra one and a half workers per store across the entire fleet.
Speaker A:To say nothing of the added expense that comes from initiatives when you start saying things like we're going to increase employee training as well, in addition to having to replace the work from the workers who've left.
Speaker A:So these investments, to me, they don't, they on the core, they don't amount to anything when you step back and you do the numbers unless they're also putting more money behind training and store efforts.
Speaker A:But the articles didn't really hint to that.
Speaker A:They said it was all coming through the layoff.
Speaker A:So, and I don't know what's your take here?
Speaker A:Do you agree with me?
Speaker A:Do you disagree with me?
Speaker A:Are you more on Joe's side or maybe Joe agrees with me now too.
Speaker A:I don't know.
Speaker A:But where do, where do you come down?
Speaker C:Look, I think the most important thing about this is Target.
Speaker C:What Joe said, Target is acknowledging the state of their stores in the statement.
Speaker C:So I think that's not PR smoke and mirrors.
Speaker C:That's just calling it and saying we see it now.
Speaker C:This, that, that it gives me hope that we'll start to hear from Michael Fedelke some of the other things that are plaguing Target right now and that he's going to address them.
Speaker C:However, I think Joe and you bring up very good points.
Speaker C:We, the customers are going to expect to see some changes.
Speaker C:So they're, you're putting something like this out there.
Speaker C:So within a few months, customers are going to expect to see that stores look better, that they're getting better support within their store, their Target stores on their Target runs.
Speaker C:And so I think it's really up to Target to, to prove it themselves.
Speaker C:They'll, They've.
Speaker C:They've put it out there, they've set a goal publicly, and now we'll see if they can.
Speaker C:If they can make good on it.
Speaker C:But I think, you know, you also bring up some good points when you were doing the math.
Speaker C:Like, I think there's also stuff going on behind the scenes that we are not privy to that is like, what.
Speaker C:What does this mean then?
Speaker C:Does a, Does a DTL now have a bigger territory that they have to look after?
Speaker C:What does that mean for their role and making sure that there's consistency across all of these things that are being done to change what the store experience is like.
Speaker C:Like, there's a lot of open questions there and what this is actually going to look like.
Speaker C:But Target said it, and now I think all we can do is wait and see.
Speaker C:Do they pay, Pay or make good on this promise?
Speaker C:And, and is this the first, hopefully, of many things that we see Target outwardly acknowledge and then make good with?
Speaker A:Yeah, and as a former district manager, I can tell you, yes, that's going to be the case.
Speaker A:Like, that's, that's how this works.
Speaker A:They're going to have more territory to cover.
Speaker A:It's going to be more travel expenses, too, that have to be, you know, accounted for.
Speaker A:So, Joe, any last word on this one?
Speaker B:No, I, I think I agree with you both that, you know, if this is, if this is it, if, you know, here's.
Speaker B:Here's the plan, like, we fire these 500 people and everything will be golden in our stores.
Speaker B:Like, clearly that doesn't seem possible to me.
Speaker B:And as the shop talk guy, I'll always probably be more diplomatic than you guys could be about it.
Speaker B:But, but, but, so, so I guess my, my optimistic view is, is like, Ann, like, this is, this is the first step, and there will be more steps announced in, in coming weeks.
Speaker B:And then, you know, hopefully again, shoppers will start to see execution, you know, in, in the next six, eight weeks, few months.
Speaker A:Yeah, yeah, Joe, I think everybody's more diplomatic about things that I am.
Speaker A:That's probably the rule of this show.
