Target Denies IT Layoffs In India While Borders Promises Them

Written by Evan Schuman
February 1st, 2010

This has been a difficult—and truly odd—last few weeks in the retail IT world. Target CIO Beth Jacob made the highly unusual move of issuing a statement denying that the retailer planned to sell its Target India IT operation. (What does it mean when the executive vice president of a $63 billion retail chain publicly reiterates its commitment to your team? Update your resume.)

“Our captive center in Bangalore continues to be an important part of our long-term strategy and is highly integrated with our work and team in Minneapolis,” said a statement attributed to Jacob, who is a Target executive vice president in addition to being the chain’s CIO. Added Tim Baer (another Target executive vice president and general counsel): “We do not know the source of this ridiculous speculation, but we can absolutely reaffirm that it is unequivocally not true.”

If the speculation is so ridiculous, why issue a statement quoting two executive vice presidents? The only sentence in the execs’ statement that describes these rumors says: “The company emphatically refutes the irresponsible rumor that it is engaged in any discussions, or has any plans, to sell its Target India operations.”

This is where things get scary. First, it doesn’t deny—nor could it—that the company will sell its Indian IT operations. It merely says that the chain is not—right now—”engaged in any discussions” nor does it have “any plans to sell.” That doesn’t mean Target isn’t putting out feelers prior to discussions. And not having any “plans to sell” doesn’t mean the company isn’t thinking about it. The denial is a bit too specific.

Also, the denial—as limited as it is—is restricted to selling. Layoffs and other nasty changes are not even addressed. This is as close as it gets: “Target continues to more deeply integrate the work of its Bangalore teams with its U.S.-based teams, bringing the teams, sites and work even closer together. These activities and strategic direction demonstrate our commitment to our operations in Target India and are completely counter to this persistent, inaccurate rumor.”

“More deeply integrate” could also mean that the company is seeking to reduce redundancy.

Meanwhile, Borders has announced a 10 percent cut in its corporate staff, including IT. One Borders spokesperson attributed the IT layoffs to “some redundancies in those areas in recent months because the retailer has combined its various computers systems into one.”

The layoffs were announced when CEO Ron Marshall left Borders to become CEO of the $10 billion regional grocery chain group Great Atlantic & Pacific Tea, which owns 435 grocery stores in Connecticut, Massachusetts, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia and the District of Columbia under the brands A&P, Waldbaum’s, The Food Emporium, Super Fresh, Pathmark and Food Basics. Given the morale at Borders these days, it’s not out of the question that Marshall would have jumped to a new employer even had Borders offered him a cashier job.


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