Credit…Jim Wilson/The Latest York Times
SAN FRANCISCO — Twitter’s chief executive fired two top executives, froze most recent hiring and said he was slashing spending on Thursday, because the social media company tries to vary its business trajectory while grappling with a takeover from Elon Musk, the world’s richest man.
In a memo shared with employees and obtained by The Latest York Times, Parag Agrawal, Twitter’s chief executive, said the corporate was pausing most hiring and pulling back on discretionary spending, though it was not planning layoffs. The moves stemmed partly from Twitter not hitting goals in audience and revenue growth, Mr. Agrawal wrote.
Kayvon Beykpour, Twitter’s general manager, and Bruce Falck, the final manager for revenue, are leaving, the memo said. Mr. Beykpour is being replaced by Jay Sullivan, the interim general manager of consumer product, the memo said.
“It’s critical to have the correct leaders at the correct time,” Mr. Agrawal said within the memo. He added that Twitter had decided at the start of the pandemic in 2020 to speculate aggressively in growth, but “as an organization we didn’t hit intermediate milestones that enable confidence in these goals.”
Mr. Beykpour and Mr. Falck said on Twitter that that they had been fired by Mr. Agrawal. Mr. Falck later appeared to delete his tweet.
Brian Poliakoff, a Twitter spokesman, confirmed the memo and Mr. Agrawal’s changes. He declined to comment further.
The reality is that this isn’t how and once I imagined leaving Twitter, and this wasn’t my decision. Parag asked me to depart after letting me know that he desires to take the team in a special direction.
— Kayvon Beykpour (@kayvz) May 12, 2022
The changes raise questions for Mr. Musk about his $44 billion deal to purchase Twitter. The billionaire, who has said he doesn’t care in regards to the economics of the corporate, is paying $54.20 a share for the firm. In a pitch to investors, he has also said he desires to quintuple Twitter’s revenue by 2028 and grow its users to 931 million by then, up from 217 million at the tip of last 12 months.
But Twitter’s shares have been sinking, a part of a broader pullback in technology stocks, and hovered at $45.22 on Thursday. Mr. Agrawal’s moves also signal that the corporate’s business, which relies mainly on digital promoting, is troubled. Last month, Twitter reported quarterly revenue growth and profits that fell in need of what Wall Street had been anticipating.
“Looking right into a crystal ball two weeks ago, the board made an important decision,” said Brian Quinn, an associate professor at Boston College Law School specializing in corporate mergers, referring to Twitter’s board. “The concept the board could reasonably get to a $54 price on their very own by their very own making was debatable before they took the offer — but clearly now, it’s not going to occur anytime near term.”
Mr. Musk, who also runs the electrical carmaker Tesla and the rocket company SpaceX, didn’t immediately reply to a request for comment. He has said he’ll take Twitter private and desires to enhance the product. He has also criticized a few of Twitter’s top executives publicly, especially for the best way that they’ve moderated speech on the service. The billionaire, who remains to be lining up some financing for the acquisition, is anticipated to shut the deal for Twitter in the subsequent few months.
Credit…Jason Henry for The Latest York Times
Mr. Musk could walk away from the deal, but would need to pay a $1 billion breakup fee. And so long as his debt financing for the acquisition stays intact, Twitter could bring Mr. Musk to court to force him to pay for the deal.
Mr. Agrawal, who was appointed Twitter’s chief executive last November, has made a series of changes at the corporate and terminated some longtime executives. That very same month, as an illustration, the corporate’s head of communications departed and its head of individuals said she would depart by the tip of the 12 months. In December, Twitter’s head of engineering and head of design and research left.
While Mr. Agrawal attempts to overhaul the corporate, Twitter has been in an uproar over Mr. Musk’s takeover. At an organization meeting on the day the deal was announced, Mr. Agrawal answered questions on how the deal got here to be, what would occur to employees’ compensation and jobs, and the way Mr. Musk might change Twitter.
“A few of you might be concerned, a few of you might be excited, and a few of you might be waiting to see how this goes. I do know this affects all of you personally,” he said on the time. He later added, “Once the deal closes, we don’t know what direction this company will go in.”
Credit…Twitter, via Getty Images
In his memo on Thursday, Mr. Agrawal didn’t mention Mr. Musk by name but acknowledged the corporate was in the midst of an acquisition and was unclear when it might close.
It’s unclear how long Mr. Agrawal can be in command of Twitter. Mr. Musk has floated the concept of becoming the corporate’s temporary chief executive once the deal is accomplished.
Last week at one other company meeting, Mr. Sullivan, the newly elevated general manager, told Twitter employees to remain motivated and proceed working, despite the uncertainty attributable to Mr. Musk, in response to audio of the meeting that was obtained by The Times.
“We could also be private, we could also be public, we could have an owner who desires to do something different,” Mr. Sullivan said. “We don’t know what the longer term goes to carry, but what we’ll know is we left all of it on the sector for the individuals who depend on us on a regular basis.”
Mr. Sullivan also gave a frank assessment of Twitter’s weaknesses, saying that the corporate had didn’t hang on to recent users and employees had passed the buck on fixing tough problems. He said machine learning, which is a form of artificial intelligence, was vital to Twitter’s growth. He also warned that Twitter’s content moderation policies might turn into more flexible.
“Social media is in a crisis of confidence immediately,” Mr. Sullivan said.
Kate Conger and Lauren Hirsch contributed reporting.
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