After the layoff, Target starts tearing down corporate walls

Their boss was laid off. A fifth of their department has vanished. Or they have suddenly been reassigned to a new team.

Many things changed Wednesday for the 11,300 Target Corp. headquarters employees who returned to work a day after the company laid off 1,700 of their colleagues.

Next comes a massive restructuring. By the end of the week, many Target corporate workers will be assigned to one of seven new "centers of excellence" in an effort to streamline and centralize work.

No one seems to understand yet exactly what that means and how the centers will play out. Katie Boylan, a Target spokeswoman, said conversations are underway this week to better explain to employees what these centers are and how they will operate.

Not everyone will be assigned to a center. But those that do will work directly with employees from other departments — something that wasn't always easy in the previous configuration of headquarters staff.

Chief Executive Brian Cornell will also elaborate on some of these changes as well as the company's plan for growth at a meeting next week for headquarters employees.

Target's first public mention of the "centers of excellence" concept came in a little-noticed news release in December. At that time, Target announced the formation of two such centers — one focused on the customer experience and another around data and analytics. The other five centers will be unveiled later this week.

It remains to be seen how fundamentally different these centers will be from the way Target previously operated. But Koo said if done properly, it could be a meaningful way to broaden the retailer's focus, especially as it aims to integrate its stores with online. She added that Target has already begun to head in this direction in the past couple of years as it moved away from having separate merchandise buyers for its stores and website.

"The overriding challenge for Target is breaking out of those silos," she said.

Target executives signaled some of the restructuring changes to come in a briefing with reporters last week after they laid out the company's strategic road map to Wall Street analysts in New York.

Cornell said Target had as many as six different teams working independently in similar areas. For example, teams in the marketing, merchandising and technology departments were simultaneously trying to glean insight about its core shoppers.

"It obviously creates redundancy," Cornell said, in describing the issue. "But it can also create inconsistencies."

"When you go from doing things five or six different ways to doing it once, there's efficiency and there's savings that comes along with that," he said. "But there's also the simplification. There's one group, there's one answer that can be leveraged across the entire enterprise versus the potential grayness that can creep in when different groups are performing the same kinds of functions."

The new positioning around these centers of excellence is an outcome of what Cornell told analysts was the most comprehensive strategic review in the company's history, which took place last spring and summer before he arrived. The review informed the strategic priorities Cornell has laid out since arriving last August, including a focus on digital initiatives and product categories such as apparel and home goods.

The restructuring of headquarters and the layoffs earlier this week have been overseen by a "transformation office" that was launched in December. It is led by Casey Carl, a senior vice president who was then named chief strategy and innovation officer.

"We've got to change not only what we're working on organizationally, but how we're doing the work," Carl told reporters last week.

He cited as an example the recent rollout of Target's new personalization engine, which would fall under the data and analytics center of excellence. He said Target is one of few retailers that's able to use data about what individual shoppers buy in stores with what they browse and buy online to develop product recommendations for those customers.

"When those were separate databases, we were always translating data across all of them to try to get to the right answer," she said.

Kavita Kumar • 612-673-4113