Greg Steinhafel will be stepping down from the company effective immediately.
Target did not go into detail as to why he was stepping down from his position -- but it was most likely due to the breach in consumers credit information that happened during the holiday season of 2013. The breach exposed personal data of approximately 110 million customers who had used their debit and credit cards at the store. Target spent $61 million in the final months of 2013 addressing the breach.
The Consumer Bankers Association recently said the banks have already spent $200 million related to Target's breach. The company is also facing 100 pending lawsuits from the breach. These include class action lawsuits, suits filed for banks, and suits filed from shareholders.
As a response Target announced that it will swap out its current Target REDcards, which only work at the chain, to newer models that are enabled with computer chips and require customers to type in a PIN.
Target will also be replacing payment terminals at all 1,797 U.S. stores by this September, according to CNN Money.
"Target and MasterCard are taking an important step forward in providing consumers with a secure shopping experience," MasterCard executive Chris McWilton said in a statement.
Chief Financial Officer John Mulligan will serve as interim CEO, while board member Roxanne Austin will serve as interim non-executive chair of the board. Company spokesman Dustee Jenkins said the board would look at both internal and external candidates for a replacement.
Steinhafel, who had been with Target for 35 years, will serve in an advisory capacity during the transition to a permanent CEO.
"Now is the right time for new leadership at Target," Steinhafel wrote in a letter to the board, saying the company is taking steps to recover from the problem.
Standard & Poor's downgraded Target's corporate debt rating by one notch at the end of March due to last year's data breach and continued losses in its Canadian division. Target opened 124 stores in Canada and lost $941 million in the process.