• Target (TGT) reduced salaried employee bonuses to 87% of eligible amounts for fiscal 2025, down from 100% in 2024, as the retailer navigates modest sales growth and operational restructuring.
  • The move coincides with new CEO Michael Fiddelke’s efforts to streamline operations, including 500 job cuts, while redirecting savings toward enhancing in-store experiences and frontline staffing.
  • Analysts note the bonus adjustment reflects broader cost pressures from tariffs and competitive retail dynamics, with Target focusing on long-term growth through store expansions and digital initiatives.

Target Corporation has trimmed bonuses for its salaried employees to 87% of eligible amounts for fiscal 2025, which ends in January 2026, according to recent filings and people familiar with the matter. This marks a reduction from the full 100% payout in 2024, as the Minneapolis-based retailer grapples with soft sales and strategic shifts under new leadership.

In a move that underscores the challenges facing big-box retailers, Target’s decision comes amid modest comparable sales growth of just 1.5% in the fourth quarter of fiscal 2024 and a mere 0.1% for the full year. Net sales are projected to rise only about 1% in 2025, with the company anticipating low- to mid-single-digit comparable sales growth long-term. “We’re focused on driving growth with urgency,” said a company spokesperson, who declined to be named, in a statement that emphasized efforts to simplify operations and boost the in-store “guest experience.”

The bonus cut affects salaried workers across corporate, store, and distribution roles, though it’s not as severe as initially reported—earlier headlines had suggested a drop to 75%. Instead, the 87% payout aligns with Target’s performance metrics and follows a multi-year sales slump that has prompted cost controls across the retail sector. This adjustment is part of broader restructuring led by CEO Michael Fiddelke, who started earlier in 2026 and has overseen 500 job cuts—100 in store districts and 400 in the supply chain—to free up resources for more store hours and training, without raising hourly wages, which range from $15 to $24.

Efforts to restructure its operations have hit a snag, however, as tariffs on imports from China, Canada, and Mexico add to cost pressures, while consumer budget tightening and sluggish retail sales squeeze margins. Target is also enhancing its grocery supply chain to compete with rivals like Walmart (WMT) and Amazon (AMZN), according to industry analysts. Without a deal to boost sales, the company could face continued earnings softness, though it has reaffirmed its Q4 sales and earnings guidance.

In parallel, Target is slashing prices on thousands of items and trimming its profit outlook, mirroring moves by retailers such as TJ Maxx (TJX) and Lowe’s (LOW). The bonus reduction, while not widespread, has drawn attention internally, with affected employees offered transition support. “It’s a tough but necessary step as we pivot toward long-term growth,” said a source close to the company, who spoke on condition of anonymity. Leadership changes are also underway, with Rick Gomez departing as Chief Commercial Officer, Jill Sando retiring, and new appointments like Lisa Roath to COO and Cara Sylvester to Chief Merchandising Officer, effective February 15, 2026.

Looking ahead, Target’s future outlook hinges on faster goods assortment, store remodels, and digital upgrades, with plans for 300 new stores generating $15 billion in incremental sales over the next decade. The company also aims to expand its advertising arm, Roundel, valued at over $1.5 billion, and its e-commerce platform, Target Plus. Analysts see potential in a $5 billion store revamp but warn of sales risks if consumer spending remains tepid. As one retail expert put it, “Target’s playing catch-up in a crowded field, and these cuts are a sign of the times—every dollar counts.”

Correction: An earlier version of this article misstated the bonus reduction as 75%; it has been updated to reflect the correct figure of 87% based on company filings.