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Target tech chief resigns amid security overhaul

AP Securing Credit Cards

A customer signs his credit card receipt at a Target store in Tallahassee, Fla.(Photo: Phil Coale, AP)

Story Highlights

  • Target is overhauling information security and compliance
  • CIO Beth Jacob had job since 2008
  • Retailer will also look for a chief compliance officer and chief information security officer

Target's Chief Information Officer Beth Jacob is resigning as the retailer attempts to rebuild its information security and compliance divisions after suffering a massive data breach.

Target CEO Gregg Steinhafel said in a statement given to USA TODAY that Target will search externally for an interim CIO to "guide Target through this transformation."

Jacob had held the job since 2008.

Target is also looking for a chief compliance officer and chief information security officer as part of the overhaul. In Steinhafel's statement, he said the retailer is working with an outside adviser, Promontory Financial Group, "to help us evaluate our technology, structure, processes and talent as a part of this transformation.

Minneapolis-based Target disclosed in December that the financial records of 40 million customer accounts had been compromised between Nov. 27 and Dec. 15. It revealed in January that personal information for up to an additional 70 million people[1] had also been hacked during the same breach.

Before the overhaul, information security functions were split among a variety of executives. Target's new chief information security officer will centralize those responsibilities, the company said.

The previous duties of chief compliance officer were overseen by Target's current vice president of assurance risk and compliance, who had previous plans to retire at the end of March. Now, Target is separating the responsibility for assurance risk and compliance.

The breach botched the retailer's sales numbers for the fourth quarter[2] as customers grew skeptical of shopping at the stores. Last week's earnings report showed the breach cost Target $61 million in the fourth quarter – $17 million in net expenses, and counting a $44 million insurance receivable. Net income fell 46% to $520 million, or 81 cents a share, from $961 million, or a $1.47 a share, a year earlier. Sales fell 5.3% and revenue at stores open at least a year fell 2.5%.

Target stock closed Wednesday down 1.19% to $60.60 a share.

The incident has renewed data security as a crucial priority for the retail industry[3]. Target last month announced it would speed up a $100 million effort to adopt more secure chip-based cards and payment terminals. It's also pledged $5 million toward a cybersecurity awareness campaign over the next several years as part of the efforts of a coalition it formed with security organizations. Target is also offering free credit monitoring for a year to all customers.

In her resignation letter to Steinhafel, given to USA TODAY by Target, Jacob did not give a reason for leaving and did not mention the data breach. She said, "This is a time of significant transformation for the retail industry and for Target," and said that "this is a good time for change."

Contributing: Associated Press, USA TODAY's Bruce Horovitz

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