Target is investing more in store staffing, cutting about 500 more jobs

goal It said Monday it is increasing staffing at stores, but is cutting about 500 jobs at distribution centers and regional offices as it tries to win back shoppers who have complained about cluttered shelves, out-of-stock items and longer checkout lines.

In an internal memo to employees obtained by CNBC, the big retailer said it is making changes to the way it manages and oversees stores to improve the customer experience, which is the top goal of the company’s new CEO, Michael Fedelke.

To do this, Target said it will reduce the number of store zones — the geographic areas into which its nearly 2,000 stores are raided and which have dedicated staff — and allocate money for additional hours for front-line store employees.

As part of the changes, Target is laying off about 500 people, including about 100 across the store area and about 400 across its supply chain locations, the internal email said.

“This change also enhances our ability to create more payroll in our stores — primarily in overtime and hours where it’s needed most, but also in new guest experience training for every team member in every store,” the email said.

The email was written by Adrian Costanzo, chief store officer, and Gretchen McCarthy, chief supply chain and logistics officer, and was sent to Target employees across its headquarters and field store teams on Monday afternoon.

A Target spokesperson declined to specify the amount of additional investment planned for Target stores, but said the announcement would not change starting wages for store workers, which range from $15 to $24 per hour depending on location.

For Target, the organizational shift represents one of the first changes under Fiddelke, who previously served as the company’s CFO and chief operating officer, and who took over the top job on February 1.

Fiddelke takes the helm as the company aims to return to growth. Its annual sales have remained roughly flat for four years, and it cut 1,800 jobs at the company last year in its first major layoffs in a decade.

Customers, vendors and investors say the company has become weaker in some key areas where it used to stand out. For example, some shoppers said Target lost its edge with attentive customer service and trendy, on-trend merchandise that earned the company the nickname “Tarzhay.”

The company has also faced backlash and boycotts from customers over a series of political and social stances over the past few years, including its decision to sell and then pull some Pride Month merchandise, its embrace and reversal of major diversity, equity and inclusion initiatives, and, most recently, for not speaking out against increased immigration enforcement in its hometown of Minneapolis.

Besides Target’s self-imposed struggles, the company has faced stiffer competition from its peers Walmart And a tougher economic backdrop. Consumers have been more selective in recent years about discretionary purchases and impulse items — the sweet spot — while paying more for necessities like groceries and rent.

In an interview with CNBC at Target’s Minneapolis headquarters in October, Fedelke said his main priorities as CEO would be to restore Target’s reputation for style and design, provide a more consistent customer experience and use technology to speed up business.

However, he added, Target needs to streamline a process that has become more complex for store managers and employees in recent years, as they not only stock shelves, but pick orders for curbside pickup or pack cardboard boxes headed to customers’ homes.

“If you’re a store manager now, yes, you’re supporting your guest in the store and you’re also running an order fulfillment business that has become very large,” he said in an October interview. “And I think we now fully appreciate, ‘Okay, we have to make sure we’re doing a really good job and it’s a lot more complicated than it was before.’”

Last year, the company made another store-related change to try to clean up and streamline its operations. Almost all of Target’s online orders are fulfilled in stores, which takes up more employee time and store backrooms. In response, the company adjusted its online strategy, designating some stores as locations where employees pick and pack online orders for shipment to customers’ homes and drop them off entirely at other locations.

Target is expected to share more details about its transformation strategy, along with its holiday quarter results and full-year outlook, on March 3. It will host an investor event at its headquarters in Minneapolis.