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A 'difficult day' as Target lays off 1,700

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Target employees leave the Brooklyn Park campus.
Target employees leave the retail giant's Brooklyn Park campus with boxes Tuesday, March 10, 2015.
Jennifer Simonson | MPR News

Target filled in the blank Tuesday on how many headquarters jobs the company is cutting. After announcing last week that several thousand positions would be eliminated, Target said 1,700 employees are out of work. Another 1,400 open positions will go unfilled.

The 3,100 job cuts in Minneapolis and Brooklyn Park are part of an initiative to save $2 billion, according to the company. Those savings will be allocated to technology and other efforts to improve the company's online and in-store performance.

It's unclear what impact the cuts could have on Target's real estate footprint in Minneapolis and Brooklyn Park.

Target declined interview requests. But spokeswoman Molly Snyder said via email, "Today is a very difficult day for the Target team, but we believe these are the right decisions for the company."

Asked if more big job cuts could be coming, Snyder would only say Target's transformation is an "ongoing journey." She said the company will continue to look at opportunities to accelerate its growth but had nothing more to share about any additional job cuts.

Snyder said the affected employees left the company Tuesday.

Snyder added that Target "will provide each individual with a comprehensive package including more than 15 weeks of pay plus additional severance based on years of service. Target will also provide each team member with career outplacement support, access to free executive education courses, and will pay the employer portion of their benefits coverage for the next six months."

A Target employee left the Brooklyn Park campus.
Target employees left the Brooklyn Park campus with boxes as layoffs were taking place at the company.
Jennifer Simonson | MPR News

Snyder told MPR News on Tuesday that "a few team members" had been informed over the previous few days that their jobs had been eliminated, but that "the vast majority were informed today."

An employee who would not allow his name to be used, but who said he had kept his job, said employees were being called into two different meetings: one to tell them they were being let go, another to explain benefits and severance.

There was a lot of anxiety, anger and sadness, evidenced by employee posts to a popular layoff website and social media sites. But nearly two dozen people approached near the headquarters declined to grant interviews.

Even so, the sorrow was palpable at The News Room bar and restaurant, which is across the street from Target headquarters and popular with Target employees.

"A few of them came in today and said, 'This may be one of my last times here because I just got let go,'" said general manager Brad Schwichtenberg. "It's really sad for us to see friends put in a situation like that."

The company announced last week that it would eliminate "several thousand" positions, primarily at its Minneapolis headquarters, over the course of two years. While they did not disclose specific numbers, company officials said they wanted the headquarters — which employs about 13,000 people — to have a "simpler and more nimble structure."

Two men left Target headquarters
Two men left Target headquarters at 11th Street and Nicollet Avenue in downtown Minneapolis this morning, March 10, 2015.
Tim Nelson | MPR News

Target is Minnesota's fourth-largest employer, after state and federal governments and the Mayo Foundation.

The company's plans to overhaul the way it does business would include a major push to expand its online and mobile sales operations. Its plans to open stores in the future "will increasingly focus on new, more flexible formats like TargetExpress and CityTarget, which cater to guests in rapidly-growing, dense urban areas."

The company has said it plans eight TargetExpress locations across the country this year and will continue to test new layouts in its conventional stores.

In January, Target announced it would close its 133 stores in Canada, after suffering operating losses of about $2 billion in less than two years there.

In early February, Target announced it was cutting about 550 positions at its Twin Cities headquarters as it liquidated its Canadian operations.

Analysts suspect the big cuts will end with this round, as long as Target's performance continues to improve.

"If these guys continue to do well and continue on their current path, I think this is the last of the layoffs," said Brian Yarbrough, a retail analyst with Edward Jones. "If the business takes a turn for the worse and they're not achieving their goals, you could see them look for ways to cut additional costs."

Retail consultant Carol Spieckerman said Target is following many other retailers in eliminating jobs.

"Retailers across the globe over the last couple of years have been in the midst of major restructures and along with that they've all been eliminating certain types of positions that are no longer going to be relevant," she said.

Spieckerman also thinks the cuts are over at Target, especially since this round follows 550 headquarters layoffs related to Target's exit from the Canadian retail market.

"I don't know why they would announce a second wave," she said. "If there are going to be additional headcount reductions, they would probably be incremental from this point."

After last week's announcement of more impending changes, Gov. Mark Dayton, whose family founded Target, told reporters that he's concerned about the well-being of those who will lose their jobs and about Target's commitment to Minnesota.

"It's a very, very important company to Minnesota. It's the largest private employer in Minnesota, for-profit employer, and it's hugely important to all of these people and their families who have to live now with a period of uncertainty over a couple of years," Dayton said, adding, it "puts all of them in a very, very, very difficult situation."

Target employees are hitting the job market at a time when demand for workers is strong.

Kathy Northamer, a district president with the Robert Half recruitment firm, says the job market is great.

"Companies are moving quicker than ever to secure people," Northamer said. "It's the type of market where employers have to move fast if they want to secure the right talent."

Other recruitment pros agree. Cindy Chandler with Chandler Group Executive Search says the Target employees have a strong pedigree.

"I think a lot of companies are interested in the talent that will come out of Target," she said.

Chandler says many headquarters employees have marketing, analytical and other skills that are readily transferable and in demand at other businesses.