Target steps up investment in store staffing, cuts about 500 other roles

Target said Monday that it’s stepping up store staffing, but eliminating about 500 jobs at distribution centers and regional offices as it tries to win back shoppers who have complained about sloppier shelves, out-of-stock items and longer checkout lines.

In an internal employee memo obtained by CNBC, the big-box retailer said it’s making changes to the way it runs and oversees stores to improve the customer experience, a top goal of new CEO Michael Fiddelke.

To do that, Target said it will reduce the number of store districts — the geographic areas that its nearly 2,000 stores are broken into, which have dedicated staffing — and put money toward more hours for front-line store employees.

As part of the changes, Target is laying off around 500 people, including about 100 at the store district level and about 400 across its supply chain sites, the internal email said.

“This change also fuels our ability to put significantly more payroll in our stores — primarily in additional labor and hours where needed most, but also in new guest experience training for every team member at every store,” the email said.

The email was written by Adrienne Costanzo, chief stores officer, and Gretchen McCarthy, chief supply chain and logistics officer, and sent to Target employees across its headquarters and store field teams on Monday afternoon.

A Target spokesperson declined to specify the amount of additional investment planned for Target stores, but said the announcement will not change starting wages for store workers, which range from $15 to $24 per hour depending on the location.

In a news release on Tuesday, Target also announced several leadership changes. Cara Sylvester, chief guest experience officer, will become Target’s chief merchandising officer, and Lisa Roath, who is chief merchandising officer of food, essentials and beauty, will succeed Fiddelke as chief operating officer.

Rick Gomez, chief commercial officer and a more than decade-long Target veteran, will leave the company. Jill Sando, chief merchandising officer for apparel and accessories, home and Fun101, will retire.

Target also affirmed its outlook for fourth-quarter sales and full-year earnings for the fiscal year that ended Jan. 31. The company said in November that it expected sales to decline by a low single-digit percentage in the fourth quarter and expected full-year adjusted earnings per share to range between $7 and $8. In the previous fiscal year, Target reported adjusted earnings per share of $8.86.

For Target, the announcements represent some of the first organizational changes under Fiddelke, formerly the company’s chief financial officer and chief operating officer, who stepped into the top job on Feb. 1.

Fiddelke took the helm as the company aims to get back to growth. Its annual sales have been roughly flat for four years, and it cut 1,800 corporate roles last year in its first major layoff in a decade.

Customers, vendors and investors say the company had gotten weaker…