“It’s about d*mn time…” - Target investors, probably

Target just pulled the trigger on its first real headcount cut in a decade…about 1,800 corporate jobs, or roughly 8% of HQ staff. Translation: a thousand pink slips and eight hundred empty chairs no one’s bothering to refill. If that sounds overdue, it’s because it is. Case in point: The Minneapolis mothership hasn’t had a proper restructuring since “Blurred Lines” was topping the charts.

(Source: Giphy) 

For more context, sales have been falling for 11 straight quarters, which is impressive if you consider how hard it is to miss that consistently. Target’s last CEO, Brian Cornell, was finally ejected from the cockpit earlier this year only to give the new guy, Michael Fiddelke, a plane that’s been nosediving since 2021… down 65% from its highs. Whereas now, he’s responded by doing what every incoming exec does when the board is collectively losing their sh*t: he found a machete. So here we are.

(Source: CNBC) 

With that said, Fiddelke’s memo read like the perfect obituary for the poor souls sitting behind desks: “Too many layers. Too much complexity. Slowing down innovation.” And while Target swears the layoffs won’t touch store or supply chain workers, the truth is this is a company that’s been sitting still for years. Walmart pivoted into groceries, Amazon turned logistics into religion, and Target stayed Target… a place where you can buy seasonal throw pillows and watch your wife spend your life savings on Stanley Cups. 

Naturally, investors are having their way with it. The Street's been begging for a headcount diet since before Christmas. Fiddelke finally delivered, and the stock popped decently because of it. However, there is still one big AF elephant in the room: Half of Target’s sales come from discretionary crap… candles, joggers, seasonal decor. Stuff that dies the second consumer sentiment sneezes. Walmart gets 60% of its revenue from groceries; Target sells “aesthetic.” And aesthetics doesn’t pay when inflation’s still stealing grocery money. This is precisely why Walmart’s stock is up 121% in five years, and Target’s is down 41%.

(Source: Giphy) 

Which is why now, Fiddelke is aiming the red bullseye at itself. Of course, the layoffs won’t fix too much of anything yet, but they do prove that the era of corporate “complexity” is over. And that at least counts for something. Meaning, keep your eyes on Target and place your bets accordingly. Until next time, friends…

At the time of publishing, Stocks.News holds positions in Amazon as mentioned in the article.