Target Is Betting Another Billion Dollars on a Comeback — Even as Layoffs Raise Eyebrows
Target has been trying for months to shake off a rough stretch, and this week the company made two big moves that show just how determined it is to turn things around.
What’s going on behind the scenes?
Retail is changing faster than many expected. Consumers under pressure from high inflation and a delayed U.S. government shutdown are trimming non-essential spending—something Target feels acutely in categories like apparel and home décor. Reuters At the same time, the retailer is losing ground to rivals such as Walmart Inc. and Amazon.com, Inc., which are capturing more foot traffic and online spend with simpler value propositions. us.fashionnetwork.com
Incoming CEO Michael Fiddelke (set to officially step in next year) says the corporate cuts and investment are meant to do one thing: “move faster, simplify how we work, and bring ideas to life.” Reuters+1
Why the investment matters:
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About $1 billion will go toward new store openings, remodels, and a focus on enhancing digital operations—from faster checkout to better online-to-in-store experiences. Reuters
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Price cuts are being rolled out: ~3,000 everyday items will be cheaper, including a more affordable Thanksgiving meal kit, to win back cost-conscious shoppers. Reuters
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Store employees are being encouraged to “spend more time interacting with guests” as part of the push to rebuild customer loyalty. Reuters
The risks are real.
Cutting jobs and injecting capital are bold moves—but if the economy remains weak and consumers continue shifting, these changes may not be enough. The company’s stock has already fallen more than a third this year. Reuters
First came the headline that rattled a lot of employees: about 1,800 corporate jobs are being cut. It’s a deep slice, especially for a brand that usually highlights its “people-first” culture. But behind the scenes, executives hinted that the layoffs are part of a wider reset meant to streamline operations before the company enters what it calls its “next chapter.”
Then came the second announcement, and this one grabbed Wall Street’s attention. Target is ready to invest another $1 billion across its stores and operations in an effort to spark sales after several sluggish quarters. The company clearly believes the only way out of a slump is to spend its way into a stronger position — better stores, smoother operations, and refreshed shopping experiences.
All of this sits on top of Target’s Q3 earnings, which showed some progress but also left investors with mixed feelings. Sales haven’t bounced back as fast as hoped, and customer traffic is still uneven. That’s likely why the company is making these big, dramatic choices now rather than easing into change slowly.
So what does all of this add up to?
Target is trying to prove it still has the spark that made shoppers love it in the first place. The layoffs are tough, but the billion-dollar reinvestment shows the company isn’t retreating. It’s pushing forward — and loudly.
Whether customers respond the way Target hopes is something we’ll see in the next few quarters. But one thing is clear: the company isn’t waiting around for a miracle. It’s forcing the comeback.
Target’s bet on investing big and cutting deep signals one thing loud and clear: in retail today, standing still means falling behind. The real test won’t be how much they spend—it will be how fast they bring the change to every aisle.