BUSINESS

Target Layoffs In U.S. Another Effect Of Retailer's Canadian Misadventure

02/11/2015 04:12 EST | Updated 02/11/2015 04:59 EST
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Some 550 Target employees at the company’s headquarters in Minneapolis will be handed pink slips, at least partly a consequence of the retailer’s foray into Canada.

Approximately 350 jobs at the company’s corporate offices will disappear immediately, while another 200 “are needed through the closure of the Target Canada stores” and will remain until after the liquidation is over, according to a statement from the company quoted by the St. Paul Pioneer-Press.

It’s a sign that the failed expansion into Canada will have repercussions for the retailer well beyond the soon-to-be-shuttered Canadian stores.

But unlike their Canadian compatriots, some laid-off Target workers in Minnesota will be given severance pay.

According to KARE News in Minneapolis, “certain employees” will receive severance packages proportional to their length of service. They will also see their benefits continue for six months past termination.

It's unclear how many of the employees will receive severance, and how much they will get.

Laid-off rank-and-file employees at Canadian stores will not be receiving any severance, a sore point for many of them who point out that the top two dozen or so managers will receive an average of $30,000 each.

Target set up a $70-million compensation fund to pay workers when the Canadian division declared bankruptcy in January. The fund came in for criticism when it was pointed out that it amounts to roughly the same amount of money that Target gave to outgoing CEO Gregg Steinhafel when he departed the company in 2014.

Others accused the fund of being unfair, as some workers will be required to work to receive money from the fund, while those let go earlier will continue to receive the money without working.

Target announced in January it would be withdrawing from Canada entirely, shutting 133 stores and writing off US$5 billion on the two-year stint north of the border.

The company launched its liquidation sales last week, to criticisms that the prices weren’t low enough -- the same complaint many Canadians shoppers had about the chain throughout its time in Canada.

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Stores That May Disappear From Canada