Twitter has been in a state of transition over the last year, falling short even as it tries to come up with ways to grow its stagnant user base. Now, two senior executives have left the company after disagreements about how best to proceed. Is this an indication of Twitter’s future or just another bump in their tumultuous road?
According to an internal message, Twitter CEO Parag Agrawal revealed the steps along with the surprising resignation of two top employees.
Mr. Agrawal said in the message, which was read by The Wall Street Journal, that “effective this week, we are halting most recruiting and backfills, save for business vital jobs.”
Twitter’s action comes amid a larger upheaval in the digital sector, with numerous businesses slashing workers, lowering investment, or halting recruiting in recent weeks. Last month, Robinhood Markets Inc. HOOD 5.03 percent said that it will lay off 9% of its full-time employees and reduce the number of duplicate positions it hired while the investing platform was quickly developing, starting in 2020.
Carvana Co. CVNA 24.67 percent, an online vehicle dealer, wants to lay off 12% of its workforce.
This month, Facebook parent Meta Platforms Inc. announced a significant slowdown in recruiting, ending an era in which the internet behemoth gained thousands of people every year. Facebook has also announced a reduction in investment. According to Reuters, Meta’s high-profile Reality Labs might be impacted. Meta remained silent about the subject.
In the message, Mr. Agrawal said that Twitter would review extended offers and revoke any that it deems should be withdrawn. Mr. Agrawal noted that Twitter had no plans for mass layoffs.
Mr. Agrawal also noted that the business wants to cut expenditure on contractors and consultants, travel and events, marketing, its real estate footprint, infrastructure investment, and “other operational expenses.”
“Please continue to respect Twitter’s resources as if they were your own, and stick to your budgets while focusing on the most important things,” he wrote.
In December, Kayvon Beykpour was promoted.
Bloomberg News/Bloomberg/David Paul Morris
In Thursday’s trade, Twitter’s stock fell 2.18 percent.
Following a battle with activist Elliott Management Corp, Twitter has been on an aggressive drive for user and revenue growth. Over a year ago, the firm said that by the end of 2023, it will at least quadruple its revenue to $7.5 billion and have at least 315 million monetizable daily active users.
“At the start of the epidemic in 2020, we made the choice to spend aggressively in order to produce substantial growth in audience and revenue, and as a business, we could not meet intermediate milestones that allow confidence in these targets,” said Mr. Agrawal, who took over as CEO in November. “More lately, the global macroeconomic situation has deteriorated, and the conflict in Ukraine has had and will continue to have an effect on our performance,” he continued.
As ad buyers grapple with growing prices, supply-chain problems, the situation in Ukraine, and other issues, tech businesses are seeing their Covid-led digital ad boom starting to fade.
When parts of Meta’s services were restricted in Russia, the company ceased accepting advertisements from Russian advertisers, according to its most recent financial report. Following Russia’s invasion of Ukraine in February, Snap Inc. stated some clients briefly suspended ad campaigns, and it was worried that the climate for digital ad spending would be further disrupted.
Mr. Musk, who agreed to acquire Twitter late last month, has said that he wants to reduce Twitter’s reliance on advertising, which now accounts for nearly 90% of its income.
Mr. Musk’s impending acquisition and statements about the platform on Twitter, where he has over 90 million followers, have also caused concern among some staff. Mr. Musk criticized Twitter’s senior legal boss’s reaction to claims of political prejudice, spurring online assaults on Vijaya Gadde, the company’s veteran director of legal, policy, and safety.
According to a source who heard Mr. Agrawal’s statements last month, no layoffs are planned and the company’s goals would not change until the sale complete.
The departures this week are the most high-profile employee moves at Twitter since Mr. Musk decided to acquire it. After being elevated to their roles in December, Bruce Falck, general manager of revenue, and Kayvon Beykpour, general manager of consumer, are departing. Mr. Agrawal was promoted only days after being named the company’s new CEO, replacing co-founder Jack Dorsey.
According to a corporate representative, both executives will be replaced by Jay Sullivan. According to his LinkedIn page, Mr. Sullivan has been vice president of product since November. Mr. Sullivan will take over for Mr. Beykpour and act as Mr. Falck’s temporary successor, according to the spokeswoman.
Mr. Beykpour announced his resignation through Twitter, claiming that Mr. Agrawal asked him to quit the firm while he was on paternity leave. According to texts seen by the Journal and others familiar with the situation, the timing of Mr. Beykpour’s departure alarmed several colleagues.
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Some workers requested clarification on Twitter’s severance arrangements, claiming that given the possibility of layoffs, they wanted to know their financial stability.
“How can we be supposed to ‘continue to perform the job despite the noise’ if we don’t receive an answer?” one employee asked, using Twitter executives’ internal slogan since Mr. Musk started seeking a purchase of the company?”
Twitter has refused to comment on the reactions of its staff.
—This paper was co-written by Suzanne Vranica and Sarah E. Needleman.
Salvador Rodriguez can be reached at [email protected], and Deepa Seetharaman can be reached at [email protected]
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