An otherwise strong labor labor market is having a rough start to 2025.
There is a major labor shortage in the U.S. According to the latest numbers from the Chamber of Commerce, job openings (7.7 million) exceed unemployed workers (7 million) despite an increase in participation rates.
“Even though we have more Americans participating in the workforce today than before the pandemic, the overall share of the population participating in the labor force has dropped. If our labor force participation rate today was the same as it was in February of 2020, we would have more than two million more Americans in our workforce to help fill those open jobs,” the non-governmental organization says.
However, despite this fact, the U.S. employment rate sits at a strong 4.1%, and the 2.3 million unemployment insurance claims that were filed in March 2025 are about equal to the number that were filed in March 2015,.
However, major layoffs in the federal workforce, thanks to the austerity cuts imposed by the Donald Trump administration, are also leading to a glut of white-collar workers suddenly facing unemployment for the first time in years or even decades.
Job applications from federal workers surged 50% in February, according to LinkedIn.
Still, simultaneously, the “demand for knowledge workers (measured as those jobs that require higher educational attainment) has fallen much quicker” than an already declining labor market.
Target CEO Brian Cornell
Andrew Burton/Getty Images
Target targets employee bonuses to save costs
As rocky as the labor market has been recently, Target’s stock performance so far in 2025 has somehow been worse.
Company shares are down more than 22% since the start of the year as tariffs and the threat of more tariffs spook investors despite a strong holiday quarter from the company. The company reported that full-year net sales fell 1% year over, and analysts at BNP Paribas Exane saying the company is in a “difficult spot” this year due to the tariffs.
The company itself said that the first quarter of 2025 would feature “meaningful year-over-year profit pressure” due to the uncertainty around tariffs.
Target is looking for ways to save costs in this environment.
While employee bonuses aren’t exclusive to white-collar jobs, they often do make up a significant part of a salaried employee’s compensation.
Target is coming for those bonuses.
The new reality for Target employees
Salaried Target employees eligible for bonuses will only receive 87% of their bonuses for fiscal year 2024, the company confirmed to employment publication HR Dive. The year prior, those employees were paid 100% of their bonuses.
The bonuses were based on the company’s 2024 fiscal performance. Target saw net sales fall 1% to $106.6 billion.
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Management recognized first-quarter trends of “uncharacteristically cold weather across the U.S. affected apparel sales, and declining consumer confidence,” and said it would “continue to monitor these trends and will remain appropriately cautious” in the coming year.
Target is also undergoing austerity efforts. The company told investors that it has saved more than $2 billion over the last two years due to “ongoing efficiency efforts.”
This move could open an avenue for an ambitious competitor like Walmart or Amazon to poach talent from their wounded rival.
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