SAN FRANCISCO — Twitter’s chief executive fired two top executives, froze most new hiring and said he was slashing spending on Thursday, as the social media company tries to change 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 New York Times, Parag Agrawal, Twitter’s chief executive, said the company 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 general 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 right leaders at the right time,” Mr. Agrawal said in the memo. He added that Twitter had decided at the beginning of the pandemic in 2020 to invest aggressively in growth, but “as a company we did not hit intermediate milestones that enable confidence in these goals.”
Mr. Beykpour and Mr. Falck said on Twitter 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 buy Twitter. The billionaire, who has said he does not care about the economics of the company, is paying $54.20 a share for the firm. In a pitch to investors, he has also said he wants to quintuple Twitter’s revenue by 2028 and grow its users to 931 million by then, up from 217 million at the end of last year.
But Twitter’s shares have been sinking, part of a broader pullback in technology stocks, and hovered at $45.22 on Thursday. Mr. Agrawal’s moves also signal that the company’s business, which relies mainly on digital advertising, is troubled. Last month, Twitter reported quarterly revenue growth and profits that fell short of what Wall Street had been anticipating.
“Looking into a crystal ball two weeks ago, the board made a great decision,” said Brian Quinn, an associate professor at Boston College Law School focusing on corporate mergers, referring to Twitter’s board. “The idea the board could reasonably get to a $54 price on their own by their own making was debatable before they took the offer — but clearly now, it’s not going to happen anytime near term.”
Mr. Musk, who also runs the electric carmaker Tesla and the rocket company SpaceX, did not immediately respond to a request for comment. He has said he will take Twitter private and wants to improve the product. He has also criticized some of Twitter’s top executives publicly, especially for the way that they have moderated speech on the service. The billionaire, who is still lining up some financing for the purchase, is expected to close the deal for Twitter in the next few months.
Mr. Musk could walk away from the deal, but would have to pay a $1 billion breakup fee. And as long as his debt financing for the acquisition remains 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 company and terminated some longtime executives. That same month, for instance, the company’s head of communications departed and its head of people said she would leave by the end of the year. In December, Twitter’s head of engineering and head of design and research left.
While Mr. Agrawal attempts to overhaul the company, Twitter has been in an uproar over Mr. Musk’s takeover. At a company meeting on the day the deal was announced, Mr. Agrawal answered questions about how the deal came to be, what would happen to employees’ compensation and jobs, and how Mr. Musk might change Twitter.
“Some of you are concerned, some of you are excited, and some of you are waiting to see how this goes. I know this affects all of you personally,” he said at the time. He later added, “Once the deal closes, we don’t know what direction this company will go in.”
In his memo on Thursday, Mr. Agrawal did not mention Mr. Musk by name but acknowledged the company was in the middle of an acquisition and was unclear when it would close.
How Elon Musk’s Twitter Deal Unfolded
A blockbuster deal. Elon Musk, the world’s wealthiest man, capped what seemed an improbable attempt by the famously mercurial billionaire to buy Twitter for roughly $44 billion. Here’s how the deal unfolded:
It’s unclear how long Mr. Agrawal will be in charge of Twitter. Mr. Musk has floated the idea of becoming the company’s temporary chief executive once the deal is completed.
Last week at another company meeting, Mr. Sullivan, the newly elevated general manager, told Twitter employees to stay motivated and continue working, despite the uncertainty caused by Mr. Musk, according to audio of the meeting that was obtained by The Times.
“We may be private, we may be public, we may have an owner who wants to do something different,” Mr. Sullivan said. “We don’t know what the future is going to hold, but what we’ll know is we left it all on the field for the people who rely on us everyday.”
Mr. Sullivan also gave a frank assessment of Twitter’s weaknesses, saying that the company had failed to hang on to new users and employees had passed the buck on fixing tough problems. He said machine learning, which is a kind of artificial intelligence, was important to Twitter’s growth. He also warned that Twitter’s content moderation policies might become more flexible.
“Social media is in a crisis of confidence right now,” Mr. Sullivan said.
Kate Conger and Lauren Hirsch contributed reporting.
Source: New York Times