Another blow for Geelong as Target cuts jobs
ASU officials came out out of lengthy talks with Target executives on Friday to confirm the worst fears of its members and the city of Geelong, which has suffered a number of economic setbacks and job losses this year.
Ingrid Stitt of the ASU said Target had confirmed jobs would be lost from the 1000-strong staff at Target's headquarters in Geelong but no exact numbers were given. Target will see the union again on Tuesday.
It is possible Target, owned by the Wesfarmers conglomerate, might be able to nominate a redundancy figure next week as part of a sweeping review and restructure of its business.
Fairfax Media revealed on Wednesday that Target was reviewing its operations in the wake of a sharp downturn in its sales and profitability in the second half.
Staff cuts have already been made at its marketing department and speculation is mounting that as many as 200 more jobs might be carved out of the business in coming months.
The business review is being led by newly appointed chief Stuart Machin, Target's third head in two years. The retailer has been hit by excess inventory and a poor start to sales for the second half, exacerbated by the late start to winter.
Wesfarmers shocked investors two weeks ago with a profit downgrade for Target, flagging a potential second-half loss.
Chief executive Richard Goyder warned full-year earnings before interest and tax at Target would drop to between $140 million and $160 million, from $148 million in the first half. This could mean second-half earnings sinking to an $8 million loss or, at the upper end, a $12 million profit.
Wesfarmers also owns Kmart, Coles, Bunnings Warehouse and Officeworks.
The potential job losses at Target come at a tough time for Geelong.
Ford will pull out by 2016 with the loss of more than 500 jobs, and another 450 jobs are in doubt at Shell, which plans to sell its Geelong refinery next year.
Frequently Asked Questions about this Article…
Target has begun a review of its operations after a sharp downturn in sales and profitability. The retailer has been hit by excess inventory and a poor start to sales in the second half (made worse by a late start to winter), and says it is restructuring to address those issues.
Target confirmed jobs will be lost from its 1,000-strong corporate support staff in Geelong, but it has not provided an exact redundancy number. Union officials said Target will meet the union again next week and may nominate a redundancy figure as part of the business review.
Yes. The company has already made staff cuts in its marketing department, and there is media speculation that as many as a further 200 jobs could be carved out of the business in coming months, though that figure has not been confirmed by Target.
The business review is being led by newly appointed chief Stuart Machin, Target’s third head in two years. The move follows a profit downgrade from owner Wesfarmers, which has prompted investor concern about Target’s second-half performance and profitability.
Wesfarmers warned that full‑year earnings before interest and tax (EBIT) at Target would fall to between $140 million and $160 million. That downgrade signalled a weak second half for Target and raised the possibility of second‑half earnings falling to an $8 million loss or, at the upper end, a $12 million profit — information investors use to assess future returns.
The Australian Services Union (ASU) has been in lengthy talks with Target executives and confirmed that jobs will be lost. ASU officials, including Ingrid Stitt, said the union will meet Target again to discuss details and protections for affected members.
Potential job losses at Target come at a difficult time for Geelong. The city is already facing large workforce changes: Ford plans to pull out by 2016 with the loss of more than 500 jobs, and about 450 jobs at Shell are in doubt as the company plans to sell its Geelong refinery next year.
Target’s downturn was driven by a sharp fall in sales and profitability in the second half, which the company attributes to excess inventory and a poor start to seasonal sales — worsened by a late start to winter — prompting the current operational review and restructure.
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