Target’s Chairman, President and CEO has lost his job due to the massive data breach which occurred during the 2013 Christmas holiday season. Gregg Steinhafel has agreed to step down as CEO of the nation’s third-largest retailer, and has resigned from the board of directors. Steinhafel has been with the Target for 35 years and the company’s CEO since 2008.
The massive data breach hurt Steinhafel’s reputation and has caused the retail chain’s business to decline. The company’s shares also fell nearly two percent on Monday in pre-market trading. Currently Target’s breach is believed to be the biggest known data breach at a retailer, and according to reports, has scared off millions of customers. In February the chain reported its fourth-quarter profit had failed 46 percent on a revenue decline of 5.3 percent.
Target’s data breach did not just shake up consumers, but the retail industry as a whole. When the cyber attack occurred it resulted in stolen credit and debit card numbers, expiration dates and CVV codes. The breach also caused many consumers to become proactive with their finances as well as make the necessary attempts to secure their future shopping experience.
Often times when a data breach has taken place, in addition to credit and debit card information, the thieves are also given access the victim’s personal information such as name, address, phone number and email address. Once they have gathered this information the process of identity theft becomes much easier.
The cyber attackers which successfully hacked the number three retail chain was found to have accessed card data with programs which originated by a teenage mastermind in Russia. The 17-year-old created the malware which was used to gain access to point-of-sale terminals. Soon after this major breach the FBI issued a three page warning to U.S. retailers alerting them of future cyber attacks which were on the rise.
The departure of Target’s CEO implies the company is attempting to start fresh as it continues the process of rebuilding after the fallout from the attack. These hackers stole debit and credit card information from as many as 70 million customers and have affected the retail chain’s overall performance.
Jim Johnson will remain lead independent director on board. John Mulligan, Chief Financial Officer, has been named interim CEO and president while a member of the Target’s board, Roxanne S. Austin, has been appointed an interim nonexecutive chair of the board. During this transitional phase Steinhafel has agreed to serve in an advisory capacity.
Since the data breach was revealed on December 19, 2013 Steinhafel has faced increased pressure. The CEO wrote in a letter to the board stating,
“The last several months have tested Target in unprecedented ways. From the beginning, I have been committed to ensuring Target emerges from the data breach a better company, more focused than ever on delivering for our guests.”
Although this massive breach was a hard hit on Steinhafel’s tenure with the company, it is worthy of noting under his leadership Target has offered a five percent discount to customers who use its branded credit and debit cards and has expanded its product to include fresh groceries.
After the breach occurred Beth Jacob, chief Information Officer, resigned amid a serious of changes the company was making to revamp its overall security. Last week Bob DeRodes was named her replacement; He has 40 years of experience in information technology. The retail chain said it is continuing in its pursuit for a chief compliance officer and a chief information security officer.
Target also said that MasterCard Inc. has committed to offer branded credit and debit cards with a more secure chip-and-PIN technology. This is set to take place next year and will make Target the first major U.S. retailer that will have store cards with this technology.
Target’s Chairman, President and CEO resigned due to a major setback the massive data breach caused in December 2013. Gregg Steinhafel was appointed CEO in 2008 and has been with the company for 35 years. When speaking of Steinhafel the company released a statement saying, “We are grateful to him for his tireless leadership and will always consider him a member of the Target family.”
By: Cherese Jackson (Virginia)