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 alter 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 Recent 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 overall 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 initially of the pandemic in 2020 to take a position 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 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 top of last yr.
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 a fantastic decision,” said Brian Quinn, an associate professor at Boston College Law School specializing in corporate mergers, referring to Twitter’s board. “The thought 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 needs to enhance the product. He has also criticized a few of Twitter’s top executives publicly, especially for the way in which that they’ve moderated speech on the service. The billionaire, who remains to be lining up some financing for the acquisition, is predicted to shut the deal for Twitter in the following few months.
Credit…Jason Henry for The Recent York Times
Mr. Musk could walk away from the deal, but would should 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 example, the corporate’s head of communications departed and its head of individuals said she would depart by the top of the yr. 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’re concerned, a few of you’re excited, and a few of you’re 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 will close.
How Elon Musk’s Twitter Deal Unfolded
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A blockbuster deal. Elon Musk, the world’s wealthiest man, capped what seemed an improbable attempt by the famously mercurial billionaire to purchase Twitter for roughly $44 billion. Here’s how the deal unfolded:
The initial offer. Mr. Musk made an unsolicited bid price greater than $40 billion for the influential social network, saying that he desired to make Twitter a personal company and that he wanted people to find a way to talk more freely on the service.
Will the deal undergo? For the acquisition to be accomplished, shareholders should vote and regulators should review the offer first. Scrutiny is prone to be intense and questions remain about Mr. Musk’s plans for the corporate, especially after he suggested the deal could be “temporarily on hold” as he gathered information in regards to the volume of spam and faux accounts on Twitter. (He later said he was “still committed” to the acquisition.)
It’s unclear how long Mr. Agrawal can be in command of Twitter. Mr. Musk has floated the thought 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 brought on by Mr. Musk, based on audio of the meeting that was obtained by The Times.
“We could also be private, we could also be public, we can have an owner who desires to do something different,” Mr. Sullivan said. “We don’t know what the long run goes to carry, but what we’ll know is we left all of it on the sphere 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 type of artificial intelligence, was essential to Twitter’s growth. He also warned that Twitter’s content moderation policies might grow to be more flexible.
“Social media is in a crisis of confidence without delay,” Mr. Sullivan said.
Kate Conger and Lauren Hirsch contributed reporting.
