Target CEO Loses Job After Security Breach

Gregg Steinhafel faced intense scrutiny over the response to the data breach and disappointing revenue.
5:36 | 05/05/14

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Transcript for Target CEO Loses Job After Security Breach
-- -- -- in the market to New York are open and today's big number 35. That he is how many years Greg Stein awful worked at target. Before losing his job as -- with a huge breach of credit card data and other target customer information. Political and I'm Dan Cutler in New York on this Monday mornings here's submit his -- of the target board of directors ripped him from Yahoo! finance -- joining us this more later mr. -- happy Monday morning to -- identity of -- so this data breach happened five months ago and popular asking why then so long. Because it was about more than the data breach I think target has at least two big problems one is. Information security. But the other is its performance has been very weak they recently announced disappointing results. Revenue has been disappointing profit has been disappointing they're saying they may not meet their targets for 2014. -- we get to make things going on one. You can say three things stand one -- the -- is the data breach it happened last year to. A lot of people watching targets that they did not respond very effectively so that they sort of went mom didn't really. Hot -- give customers clear guidance about what to do in the number three disappointing financial results so I think it all came together and it's time for the CEO ago. A perfect -- net and on my credit card and data breach and that the CIO which also resigned what two months ago as well for a -- target has been making some. Some actions because of this as well and -- one of the fact that that -- has been relatively lackluster they reported February 4 quarter profits were down 46% so. It's certainly a lot of pressure it was -- awful. Right so on -- just in terms of their results. They did probably lose some sales and some customers right at the crucial point in the holiday sales season last year because. Other news about all all that customer information -- basically stolen by hackers. But part of it faces a problem that's not unique -- Wal-Mart is struggling in the same way and it's it what's going on he's trying to. Capture the middle class shopping dollar at a time when these huge stores are -- falling out of favor a little bit obviously a lot of people are shopping online these days. Target has had a disastrous -- -- into Canada that was -- the first country they -- gonna target outside the United States and there. It just -- really off the rails so that there really are a lot of operational problems and you know the same time -- has kinda lost the cool factor I mean target was. Cheap chic for awhile and you don't really hear people talking about finding cool stuff at target anymore so. He has just kind of lost its edgy and when you when you hear that the CEO it's been there for 35 years -- mean that no. Industry really has changed as much as retail every ever going away from the physical stores on line. It seems like it's time to bring somebody in from outside to get this company fixed. Rule well his resignation is immediate and the same time he's also off the board of directors. Do you get the sense of this is the kind of action that Wall Street was really looking for because you know again as we know. While you're obviously trying to please the -- -- same time we need -- please those shareholders to him. What Wall Street who had clearly has wanted something other than it's been getting the stock has been down I think it's down about 12% over last year -- The overall market has been up by about 16% during that time -- has been. Severely underperforming the market this is a big turn around the target needs to do when you have so much real -- like that you're committed all that real estate. And and the world it's shifting underneath your feet from one that could that depends less on all that physical real estate. And more in our online presence. Being able to move quickly and so on -- targeted -- is an old kind of retail company and they have faced a difficult future so. Just changing as she eight -- that's not necessarily gonna change their business model on its -- revive revitalize this brand so I think there's a lot more that needs to be done. Andrus has -- of that data breach there last week target announced that it was switching its credit and debit cards over to a more secure technologies trying to work with MasterCard and back. It's -- become the first major retailer in a country. To do to do so it has a secure payment shifts in these new cards. And ending at the same time though it what kind of -- as -- second and instill in customers because when that first announcement was made. Target has offered some incentives -- some discounts for those folks to continue to come back into -- stores and use that plastic. You know. I'm not sure that customer confidence is really issue here again. You know usually when -- -- data breaches like this it's really false to the retailer. And to the card issuer to basically protect the consumer so. For the most part this ends up being a huge expense. For the retailer into it today and also for the card issuer in this case so what -- needs to do is is protect itself. From the had a financial. Burden of having to deal with this problem which is obviously you know you've got the cost of dealing with the with the breach itself and then you lose customers on top of that so it's kind of a double whammy. The you know the retail industry has been a very reluctant to move over these new types of cards mainly just because of the costs -- caught it costs money to switch over and we're finally getting to a point I think. Weren't actually cost more to deal with the theft in the -- -- it does with the new technology to target stands to benefit here Tara could come out of this and alienated -- -- here but let's say a year saying. We now have the best depth technology United States to protect consumers are not there yet but they could end up -- that's -- to be something that helps them in the future. Bite the bullet up front our mr. Taylor from Yahoo! finance and bring back so much appreciate I think Nancy and pushing give -- latest headlines right here on abcnews.com. If you've been watching the big number and -- Cutler and New York.

This transcript has been automatically generated and may not be 100% accurate.

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