Start seeing pink slips

The ax is swinging on Nicollet Mall:

Layoffs have begun to sweep through Target Corp., even as the company’s CEO assured Gov. Mark Dayton Monday that the retailer will maintain a robust headquarters in Minneapolis after the cuts.

Some vice presidents were terminated last week, employees told the Star Tribune, in the first of what the company has said will be “several thousand” job cuts.

One employee who declined to be identified said that probably a couple of dozen upper managers were let go Monday and gone by lunch. The employee said broader cuts were expected Tuesday.

“The mood is pretty somber, about what you would expect,” the employee said.

There's no single reason for a mass layoff; it's always complicated. The Strib's Lee Schafer hits a key reason:

Those jobs will go away starting now and over the next couple of years as Target’s top leaders rethink what headquarters people should be doing. The goal is to simplify, to have folks accomplish most tasks faster and to just stop doing a bunch of others.

This means it’s not really an example of a company letting people go because it can’t afford to pay them. It’s more the case that several thousand people who report daily for work at Target need to leave because they are mostly just getting in the way.

We've talked about this before -- the actual work of running a retail operation can be difficult, but the key is putting your front line people in a position where they can succeed. For Target, that means making sure the stores understand the direction and have the ability to adapt what they do to the local market. If you have a top down leviathan at HQ, that becomes more difficult. A commenter in the online version of Schafer's article sums up the challenge well:

The myopia and arrogance of the company can be astounding. I once ran the NPV for a potential investment and was asked by my supervisor, "Did you use Target's method of calculating NPV?" I was confused by the question and asked if she meant, did I use Target's discount rate? No, she thought Target had a separate way to perform this standard financial calculation. When I politely explained that it doesn't really vary from company to company, she rolled her eyes at me and got very annoyed. Again, not making this up.

Once I decided to leave and began my job search, I did less - much less - actual work and asking questions, and started doing more of the Target-y things (signing up for Fast, Fun, and Friendly events, organizing group outings, sitting at the front in group presentations, and - yes - smiling in hallways). By the time I put in my notice I was winning awards for being a model employee, though most days I really couldn't tell you what I did.

Calculating NPV, or net present value, is straightforward. There are dozens of computer programs that can help you do it and any halfway accomplished Excel jockey can figure it out if you know what the discount rate is. Target has squadrons of finance people who spend their days working on such things and such work is necessary.

What's not necessary is the HQ pageantry. Back to our commenter:

Someone more clever than myself put it this way: "Target puts the 'cult' in culture." I worked at Target HQ for five years. It is too often an organized personality contest. Want to get ahead? Forget about actually being good at your job. Focus instead of networking pleasantly, singing the company song, and shaping your personality into the Target mold. Too often advancement wasn't based on performance, but on how "Target" or "Brand Right" you were judged to be. I must stress that I am not making this up, but I was once reprimanded because, "Our VP sees you in the hallway and you're never smiling."

I saw this trend coming when I worked there, although it wasn't yet in full bloom. I got more credit for being on the Target Volunteers HQ Committee than I did for doing my job. It was all about visibility.

I don't envy Brian Cornell. He's going to be dispatching a lot of good people. Some of the VP level people made a lot of money and it's going to be difficult to find comparable jobs. It wasn't sustainable, though. These days have been coming for a long time.