The Target layoffs are simply dumb

Tom Dougherty, CEO – Stealing Share

16 March 2015

Target should actually think bigger

It never fails to irk me when I hear about layoffs at any business. A major part of it is that I don’t like to see people lose their jobs, especially when the reason behind the layoffs has nothing to do with those employees’ performance.

Then there’s another reason. Companies often announce layoffs to reduce costs and please shareholders, without fixing the problem in the first place. Laying workers off is often like putting a Band-Aid on a sliced foot when you really should go to a surgeon.

“Retailers like Target must fix the cause not the symptom. Target needs to ask itself, ‘What do we own?'”

It is for exactly those two reasons (employees lose job, execs short-sighted) that the announcement that Target is laying off 1,700 employees last week with another 1,400 jobs on the line bothers me so much.

Target is making this move, it says, to save $500 million so it can “speed up decisions and projects at the nation’s fourth-largest retailer.”

In effect, Target is saying: “We are inefficient and shareholders want bigger dividends.”

Target layoffs

The empty aisles of Target.

The Target layoffs come on the heels of more bad news within the retail industry when, as a whole, it had its third straight month of declining sales. Retailers are saying it was because of the bad weather that kept shoppers at home, noting that online sales rose.

I think there’s some truth in that, but it amazes me that retailers fail to address to real problem. They simply are not preferred anymore.

As we pointed out in our retail study, the difference between the individual retailers has become so paper thin that inertia sets in among consumers. So shoppers fall back on online shopping, especially from Amazon.

Basically, Amazon is eating the retailers’ lunch and the response from retailers is to simply fire workers and hope that move makes the next quarter earnings look good enough for executives to keep their jobs.

Retailers like Target must fix the cause not the symptom. Target needs to ask itself, “What do we own?” Right now, it owns nothing beyond the bull’s eye logo. As things stand now and will continue to stand, that bull’s eye is right on a Target employee’s back.

See more posts in the following related categories: Retail sales Target Target brand Target layoffs

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