Holiday Retail Outlook: How Major Layoffs Could Impact Consumer Brands and What to Do About It

As the holiday season quickly approaches, recent announcements of large-scale layoffs at major retailers are sending ripples through the retail industry. These cuts—driven by over hiring during the pandemic, the rise of AI automation, and shifting consumer behaviors—could have significant implications for consumer brands and private label items.

Although Black Friday saw record-breaking online sales in the U.S., Amazon plans to eliminate up to 30,000 corporate jobs, its largest cut since late 2022. Departments affected include HR, operations, and Amazon web-based services, signaling a strategic shift toward automation. AI is increasingly taking over repetitive tasks, reducing the need for human oversight.

With 1.55 million employees globally, Amazon’s move shines light on a broader trend: technology-driven efficiency at the expense of traditional roles. While AI tools like Rufus and “Buy For Me” promise enhanced shopping experiences, they also raise concerns about depersonalization and reduced consumer engagement.

Additionally, Target has announced plans to cut 1,800 corporate jobs as part of a restructuring effort. Approximately 800 vacant positions will be permanently eliminated, while around 1,000 managerial roles will be laid off.  The company cites the need to streamline operations by reducing layers of management and eliminating overlapping responsibilities as the primary reasons for these layoffs.

What Consumer Brands Should Expect

These layoffs go beyond simple restructuring; they signal potential turbulence in the broader economy. A shrinking corporate workforce often indicates softer consumer spending, meaning consumer brands should prepare for reduced sell-through at underperforming retailers, tighter inventory management, and evolving shopper priorities as essentials take precedence over discretionary purchases.

How Consumer Brands Can Combat the Impact

Change brings challenges, but it also creates opportunities for brands willing to adapt. By embracing agility and focusing on strategic priorities, consumer brands can minimize disruption and maintain momentum during this critical season. Here are five strategic actions to help safeguard performance and profitability.

1. Diversify Partnerships: Don’t rely too heavily on a single customer, but instead, spread exposure across multiple channels, including e-commerce and direct-to-consumer. This reduces dependency risk and stabilizes revenue streams.
2. Optimize Inventory and Pricing: Closely monitor inventory turnover ratios and adjust purchasing strategies to prevent excess carrying costs that can erode margins.
3. Stay Agile with Promotions: Offer value-driven deals that resonate with cost-conscious shoppers without eroding margins.
4. Strengthen Cash Flow Management: Layoffs can lead to delayed payments from retailers. To safeguard, brands should tighten accounts receivable controls, negotiate shorter payment terms, and maintain a cash reserve to manage seasonal fluctuations effectively.
5. Re-evaluate Cost Structures: Consider trimming non-essential expenses and reallocating budgets toward high performing channels.

The combination of layoffs, AI adoption, and economic uncertainty could reshape holiday retail outcomes. Brands that stay proactive, while leveraging data, diversifying channels, and focusing on consumer trust, will be best positioned to weather the storm. However, businesses shouldn’t face this alone.

Engaging advisors early on can help mitigate risks and identify strategies to maintain stability and profitability throughout the holiday season and beyond. For more information, contact Carolyn Naporlee-Cipolla, Director and Co-Leader of Anchin’s Beauty, Health, and Wellness group, or your Anchin Relationship Partner.