Target is dropping its health care coverage for part-time employees as part of widespread company cutbacks.
According to the Minneapolis-based retailer that employs some 361,000 people nationwide, just 10 percent of its workforce who were eligible for the company’s part-time health care plan have not signed up.
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"Health care reform is transforming the benefits landscape and affecting how all employers, including Target, administer health benefits coverage," Jodee Kozlack, Target's executive vice president of human resources, said in a corporate blog post Tuesday, The Associated Press reported
"Our decision to discontinue this benefit comes after careful consideration of the impact of our stores' part-time team members and to Target, the new options available for our part-time team, and the historically low number of team members who elected to enroll in the part-time plan," Kozlack added.
Those part-time Target employees who will be losing their coverage will receive $500 cash stipends that can be put toward the purchase of a government health care plan.
Target's part-time health care plan will be discontinued April 1.
Other large employers, including UPS, are also scaling back health coverage by dropping spouses from their employee plans if they are able to get insurance through another employer, the AP noted.
In a separate announcement on Wednesday, Target said it would be laying off 475 employees. The retailer has already eliminated 700 open positions over the past six months.
"As an organization, Target continually assesses our operating model to ensure we are well positioned to adapt to changing business needs," Molly Snyder, a Target spokeswoman, said in a statement. "We believe these decisions, while difficult, are the right actions as we continue to focus on transforming our business."
In addition to the layoffs, job eliminations, and health care plan cancellations for part-time employees, the retailer also lowered its fourth-quarter profit outlook.
During trading on Wednesday, Target's shares slipped 22 cents to $58.98, a drop of four percent over the past year.
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The decline in sales is largely due to Target's substantial security breach
in which hackers gained access to data connected to upwards of 40 million credit and debit cards used at Target between Nov. 27 and Dec. 15.
Last week, a 17-year-old from Russia was identified as the source for the malicious software
that allowed shoppers' data from Target to be stolen, according to a California-based security firm.
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