Target Corp announced today the removal of Chairman and Chief Executive Gregg Steinhafel in response to the recent extensive security breach that involved the theft of millions of payment card numbers. Steinhafel has been Target's CEO since 2008, and the Minneapolis based company has named Chief Financial Officer John Mulligan as interim chief executive. Target's shares fell as much as 3 percent in morning trading.
In December, the company fell victim to a cyber attack that resulted in the theft of at least 40 million payment card numbers and 70 million other pieces of customer data. It was the second largest breach in history. The incident crumbled customer confidence, hurt profits, and according to Reuters, even prompted congressional hearings.
The company's profits also suffered this year as the expansion into Canada failed to meet even modest expectations. The company reported a total loss of about $1 billion in 2013 in Canada, on sales of about $1.3 billion. "Clearly the data breach was not good publicity … but in terms of an executive decision from a strategy point, the entry in Canada has really not gone the way company planned," explained Ken Perkins, analyst at the investment research firm Morningstar.
Since last year, the company has seen net profits drop 34 percent. Target released a statement that defended Steinhafel's "tireless leadership," and while also announcing "that now is the right time for new leadership."
As John Mulligan prepares to lead Target Corp, the company will be undergoing major adjustments. Dealing with organization change management can be a difficult period in a company's history, but it is important to maintain a consistent workflow throughout the process.
At Xbig6, our expert consultants are established leaders in Change Communication and Organizational Alignment. We can help ensure that a transition moves seamlessly and the company emerges prepared to face a brighter future.