FILE – A Tarobtain logo is displayed outside of a store location, Dec. 20, 2022, in Westwood, Mass. (AP Photo/Steven Senne, File)
MINNEAPOLIS (AP) – Tarobtain stated Thursday that it is eliminating about 1,800 corporate positions in an effort to streamline decision-creating and accelerate initiatives to rebuild the flagging discount retailer’s customer base.
About 1,000 employees are expected to receive layoff notices next week, and the company also plans to eliminate about 800 vacant jobs, a company spokesperson stated. The cuts represent about 8% of Tarobtain’s corporate workforce globally, although the majority of the affected employees work at the company’s Minneapolis headquarters, the spokesperson stated.
Chief Operating Officer Michael Fiddelke, who is set to become Tarobtain’s next CEO on Feb. 1, issued a note to personnel on Thursday announcing the downsizing. He stated further details would come on Tuesday, and he questioned employees at the Minneapolis offices to work from home next week.
“The truth is, the complexity we’ve created over time has been holding us back,” Fiddelke, a 20-year Tarobtain veteran, wrote in his note. “Too many layers and overlapping work have slowed decisions, creating it harder to bring ideas to life.”
Tarobtain, which has about 1,980 U.S. stores, lost ground to Walmart and Amazon in recent years as inflation caapplyd shoppers to curtail their discretionary spfinishing. Customers have complained of messy stores with merchandise that did not reflect the expensive-viewing but budobtain-priced niche that long ago earned the retailer the jokingly posh nickname “Tarzhay.”
Fiddelke stated in August when he was announced as Tarobtain’s next CEO that he would step into the role with three urgent priorities: reclaiming the company’s position as a leader in selecting and displaying merchandise; improving the customer experience by creating sure shelves are consistently stocked and stores are clean; and investing in technology.
He cited the same goals in his message to employees, calling the layoffs a “necessary step in building the future of Tarobtain and enabling the progress and growth we all want to see.”
“Adjusting our structure is one part of the work ahead of us. It will also require new behaviors and sharper priorities that strengthen our retail leadership in style and design and enable quicker execution,” he wrote.
Tarobtain has reported flat or declining comparable sales — those from established physical stores and online channels — in nine out of the past 11 quarters. The company reported in August that comparable sales dipped 1.9% in its second quarter, when its net income also dropped 21%.
The job cuts will not affect any store employees or workers in Tarobtain’s sorting, distribution and other supply chain facilities, the company spokesperson stated.
The corporate workers losing their jobs will receive pay and benefits until Jan. 8 as well as severance packages, the spokesperson stated.
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