Target (NYSE:TGT) announced plans to cut several thousand jobs, mainly at its U.S. and India headquarters. The company aims to cut $2 billion in costs in the next two years.
CEO Brian Cornell said Target's management needs streamlining, reported Reuters. The big box retailer's merchandise will be revamped to attract millennials and Latinos, meaning an investment in the store's grocery section to include more organic, natural and gluten-free food offerings.
The company has focused in on seven grocery categories, where it thinks it will best attract younger families, Hispanics and urban dwellers, reported the Wall Street Journal.
"We are in the very early stages of a real shift in our business," Cornell told investors, according to the Wall Street Journal. Target intends to simplify management and speed up the company's turnaround plans.
Cornell said the company would invest $1 billion in technology and an upgrade in its supply chain. Digital growth will still remain a priority, as Cornell announced last week. For the quarter, digital sales were reported to grow 36 percent, due in part to record holiday sales, and the company predicts a growth of 40 percent for all of 2015.
Cornell is not shy about making big changes. At the beginning of the year, he announced the shuttering of Target's Canadian stores. In addition, last week the company cut the free shipping threshold in half to $25.
He is finally starting to see the fruits of his efforts. The company posted a 3.8 percent increase in same-store sales in the latest quarter.
Cornell said that despite efforts to cut back on spending, employee wages will continue to see normal annual increases. And the company plans to resume share repurchases in an effort to buy back $2 billion in stock this year.
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