Target Corp. on Wednesday informed workers that it’s terminating 475 positions at its offices globally.
In addition, over the course of the last six months, Target identified another 700 open positions worldwide that it has closed. “We looked across the organization and identified areas where this made sense,” a spokeswoman said, adding that the moves are not in response to or related to the data security breach Target suffered last month. “We’re looking at our overall business as we continue to set ourselves up for future success,” she said.
Terminated employees will stay on the payroll for 45 days and will be offered comprehensive severance packages.
“As an organization, Target continually assesses our operating model to ensure we are well-positioned to adapt to changing business needs,” the spokeswoman said. “We believe these decisions, while difficult, are the right actions as we continue to focus on transforming our business. We will continue to invest in key business areas to strengthen our ability to compete and thrive well into the future.”
Target has acknowledged that the security breach in December may have scared away shoppers and could negatively impact its fourth quarter. The credit and debit card information of 40 million customers and the personal information of another 70 million shoppers might have been stolen.
Target updated its fourth-quarter outlook and now expects fourth-quarter 2013 adjusted earnings per share of $1.20 to $1.30, compared with prior guidance of $1.50 to $1.60. This outlook anticipates a fourth-quarter 2013 comp-store sales decline of about 2.5 percent, compared with prior guidance of flat comps.
Prior to the security breach, Target was experiencing stronger than expected fourth-quarter sales. Target has said it expects 45 cents of dilution related to its Canadian segment, compared with prior guidance of 22 cents to 32 cents of dilution, driven by the gross margin impact of efforts to clear excess inventory.