Target announced a new direction for its company on Tuesday, which includes letting go thousands of its workers and cutting its budget by $2 billion.
“Cost savings of $2 billion over the next two years will fuel Target’s growth and drive profitability. … This includes the establishment of centralized teams based on specialized expertise and the elimination of several thousand positions over the next two years,” Target said in a Tuesday press release.
Additionally, the mega retailers is investing $1 billion in technology and supply chain streamlining as it seeks to recover from a hacking attack that cost Target and credit card companies around $200 million.
Target currently employs more than 350,000 workers worldwide, with nearly 2,000 stores in the U.S. alone.
According to Business Insider, Target is likely developing a new game plan for the future to reorient itself after its debacle in Canada. Over the last two years, Target invested $4.4 billion in a Canadian expansion. Since that investment, Target has accumulated $2 billion in debt.
Target’s CEO, Brian Cornell, said in the Tuesday statement, “there’s no doubt that transformation can be challenging, we’re taking the steps necessary to unleash the potential of this incredible brand. I’m encouraged by our early momentum, and am confident that by implementing our strategy, simplifying how we work, and practicing financial discipline, we will ignite Target’s innovative spirit and deliver sustained growth.”
In the new vision, Target plans to place a higher focus on more flexible formats like TargetExpress and CityTarget, which cater to guests in more densely populated urban areas.
Moreover, the retailer said it will make more efforts to provide a better grocery experience. Target stated that it will do this by creating “a more guest-centric experience by tailoring its assortment and offering more locally relevant products, with demographics, climate, location and other guest-led factors driving merchandising decisions.”
A Target spokeswoman told Business Insider that the projected job cuts will get “a more specific timeline” in the coming months.