Target Corp., the nation's second-largest discount chain, plans to cut its headquarters workforce by 9 percent, or about 1,000 positions, and close an Arkansas distribution center as the retailer continues to struggle with weaker-than-expected sales amid the U.S. recession.
The company has been battling falling sales for more than a year as shoppers began eschewing its cheap-chic offerings for a back-to-basics approach heralded by the likes of Wal-Mart Stores.Inc.
The job cuts mark the first sweeping layoffs for the 47-year-old company that pioneered design for the masses.
"This is not business as usual for Target," said Lissa Reitz, a company spokeswoman. "The current economic environment puts everyone in a different spot."
The workforce reduction eliminates 600 jobs and 400 open positions, primarily in the Minneapolis-St. Paul area, with most of the layoffs to occur Tuesday. Additionally, the company said it will close its Little Rock, Ark., distribution center, which employs 500 people, later this year.
Target has also reduced its planned store openings, implemented initiatives to improve store productivity and cut other operating expenses.
Still, President and Chief Executive Gregg Steinhafel said the job cuts are needed to ensure the company "remains competitive over the long term."
Many retailers have had to cut back on overhead, and Target joins a growing list of those reducing staff. Such measures as companywide expense controls and suspensions of share buybacks have not been enough to offset slumping sales.
Shares of Target were up 1 cent in after-hours trading, at $33.35, but have tumbled 44 percent from a 52-week high in September.
Source : ChicagoTribune
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]
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