Start seeing red

It's a sign of the times:

Target Corp. is the dominant employer in downtown Minneapolis. The 10,000 people on its headquarters payroll are a prime clientele for bars and restaurants around Nicollet Mall. Many of them live in the urban core.

So the company’s newly announced plan to empty thousands of desks over the next two years could significantly interrupt the momentum of an increasingly vibrant city center.

“They’re the No. 1 employer — that’s the whole story. They are the anchor downtown,” said Russ Nelson, president of NTH real estate and project management. “There are Target vendors, the other professionals that serve them, the lawyers.”

Beyond everything else, the Sword of Damocles manner of the announcement isn't helping people much, either:

“A lack of information breeds uncertainty,” said John Budd, industrial relations chair at the Carlson School of Management at the University of Minnesota. “Alleviating uncertainty requires open communication and high levels of transparency.”

As the news spread Tuesday, Cornell and other executives were still on stage taking questions from analysts. No one brought up the number of people being affected by the cuts, part of a $2 billion cost-reduction program. When an analyst asked how Target can minimize the friction and distraction of downsizing, Cornell said he appointed a senior executive to lead it. “We recognize it is a time of significant change,” he said.

And a certain scion of the family that began Target isn't too crazy about things, either:

Gov. Mark Dayton said Wednesday that Target Corp. layoffs will create a "very, very, very difficult situation" for thousands of Minnesota families. Noting the decision has already been made, Dayton said he nonetheless requested a meeting with CEO Brian Cornell to hear his rationale for plans to lay off several thousand employees in the next two years, largely at the company's downtown Minneapolis headquarters.

"I did not receive any kind of advance notice," Dayton said Wednesday morning in response to a reporter's question. He said he and Lieutenant Gov. Tina Smith, his frequent emissary to the business community, want to meet with Cornell "as soon as possible."

A few thoughts:

• If nothing else happens, the news underscores an important point about Target Corporation -- sentiment doesn't mean much. The company razed the first store in the chain, T-1 in Roseville, without thinking twice about it. The history of that building meant nothing. The real estate did. The bottom line on the ol' SCCR (Targetspeak for a P&L) is the only thing that matters.
• Businesses are required to report mass layoffs to the state government, so Dayton's concerns are legitimate. The reporting requirement allows the state time to prepare for processing unemployment claims and other transition costs. The other issue is that the layoffs kinda harsh the mellow on the booming Minnesota economy narrative. To be certain, Target didn't decide to cut a substantial part of its payroll because of government intrusions per se, but those haven't helped much, either.
• I am concerned about the collateral damage to other businesses. A lot of companies maintain office space in Minneapolis precisely because they are Target vendors. The buildings near Target HQ are full of vendors and suppliers and a few of them will need to rethink their tenancies. The downtown bars and restaurants rely on Targeteers for a lot of business as well; if there are, say, 5,000 less people prowling the skyways during the day it's going to have a big impact.
• Morale has to stink at Target Plaza right now. Being on the business end (pun intended) of a corporate downsizing is quite demoralizing. Getting the work done becomes even more difficult because employees get fatalistic and apathetic. That's a tough position.