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Target CEO's Walmart Past May Shape Post-Layoff Management

MINNEAPOLIS (WCCO) -- Target stock closed down slightly a day after the company announced several thousand employees at its Minneapolis headquarters would be losing their jobs.

It's part of a restructuring plan that the CEO is promising will change how you shop at their stores.

Target is promising more organic and local foods, faster and cheaper delivery of items ordered online and a new emphasis on making it easier for you to shop using your smartphone.

CEO Brian Cornell says these are all things customers want, and Target has not delivered.

Privately, industry analysts put the minimum figure of layoffs at 2,600, which is 20 percent of Target's corporate jobs in the Twin Cities.

In a presentation to shareholders, Target executives laid out a series of missteps: from failing to embrace online shopping and speedy delivery, to losing its fashion-forward edge.

Cornell says the problem is not the stores, but the headquarters.

"Simplification, cutting complexity at headquarters will make us more competitive," Cornell said.

Translation? Too many corporate employees at headquarters is not only costing the company in salaries, but slowing down decision making.

"This is probably a great deal of what he learned when he was at Walmart," University of St. Thomas marketing Professor Dave Brennan said.

He says Cornell is reshaping Target's management structure to be like Walmart's. Cornell was previously the CEO of Walmart-owned Sam's Club.

"What Brian Cornell wants to do is he wants to reorganize, to simplify that structure and to facilitate making faster, quicker decisions and making the action occur," Brennan said.

Some changes shoppers are already seeing? Target dropped the minimum for free shipping from $50 to $25 dollars just last week.

Other changes will happen at every level as Target revamps not just its corporate staffing, but its corporate culture.

Target Marketing VP Kathee Tesija told shareholders that nothing is sacred.

"We're putting every part of our go-to-market strategy on the table," Tesija said.

CEO Cornell is promising that the $2 billion in cost cuts will be invested back into the company in areas like technology, and a big push will be to make it easier to use your smartphone to shop.

This innovation does have a price -- jobs at Target's downtown Minneapolis headquarters.

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