Departure of key executives continues sense of tumult at Twitter
SAN FRANCISCO — Five top executives have flown the coop at Twitter Inc., signaling continued upheaval at the struggling microblogging company months after founder Jack Dorsey returned to the helm.
The exodus of so many executives at once spells internal tumult at Twitter, which has battled corporate mismanagement and dysfunction for years. Dorsey, the company’s original chief executive, was brought back last year to lead the company’s transformation, with unclear results so far.
In his nearly four months as permanent CEO, he has made a host of changes: launching new Twitter products, laying off staff and hiring high-profile talent. The goal is to simplify the notoriously difficult-to-learn platform, grow its user base and advertising revenue, and prove that it has broad appeal beyond the celebrities and media personalities that dominate the site.
Despite those moves, the company’s stock price has fallen almost every day this year. Many analysts are growing impatient.
“Investors we speak with are almost universally negative on Twitter and its prospects,” Robert Peck, managing director and Internet equity analyst with SunTrust Robinson Humphrey, said in a note to clients Monday.
The San Francisco social media company announced Monday that Alex Roetter, senior vice president of engineering; Brian “Skip” Schipper, vice president of human resources; Katie Stanton, vice president of global media; and Kevin Weil, senior vice president of product, were departing. Dorsey said they had “chosen to leave the company.”
In addition, Jason Toff, general manager of the Twitter-owned social media app Vine, said he was leaving for Google to work on virtual reality.
Twitter has now lost eight of 13 executives who presented at the company’s analyst day last year.
Wall Street responded negatively to the news, sending shares down 82 cents, or 4.6%, to $17.02.
But others viewed the departures in a positive light, saying Dorsey was still in the early stages of his turnaround plan and was spearheading much-needed big changes from top to bottom. A new executive team that better aligns with his vision — whatever that is — could move the company forward and help it emerge stronger.
Scott Kessler of S&P Capital IQ is recommending a strong “buy” on Twitter stock, saying the company still has “healthy reach and revenues.”
“Twitter the company has a number of issues that need to be addressed, but Twitter the stock is, in my opinion, considerably undervalued,” Kessler said. “If you think about just the amount of cash and investments they had at the end of the third quarter, there’s a lot of financial flexibility there.”
Still, he said Twitter should make some tech-driven acquisitions and be clearer about what metrics are important to measure the company’s success.
It’s been a tumultuous period for a company that’s embedded in the cultural zeitgeist and derided by Wall Street investors. Twitter shares have fallen more than 50% in the last year.
In June, Dick Costolo stepped down as Twitter’s chief executive as the company struggled to grow beyond its 300 million active users and introduce new features. Dorsey served as interim CEO for three months before gaining the title permanently in October.
He had previously served as the company’s first chief executive after co-founding Twitter in 2006, but was fired two years later. He also serves as chief executive of the mobile payments company Square.
In October, Twitter said it would cut 336 jobs, or 8% of its global workforce. It introduced new features such as Moments, which curates some of the most buzz-worthy conversations taking place on the platform. There is also talk of increasing the 140-character limit per tweet to 10,000.
Despite those efforts, rumors that the company would be sold continued to persist as recently as last week. Potential bidders included Google, Time Warner and 21st Century Fox.
With Twitter so far behind its rivals, it might need to pivot its business entirely instead of tinkering with products and features, said David Giannetto, author of “Big Social Mobile: How Digital Initiatives can Reshape the Enterprise and Create Business Results.”
He questioned whether it even makes sense for Twitter to try to compete as a social media platform, particularly when Facebook and Instagram do social better, and Google and YouTube do media better.
“Jack Dorsey is a smart enough guy to know he had to make a change,” Giannetto said. “But if he doesn’t have an answer for what that change should be, then he only has the option to change people.”
Dorsey, 39, took to Twitter to thank the departing executives.
“I’m personally grateful to each of them for everything they’ve contributed to Twitter and our purpose in the world,” Dorsey said in a statement tweeted Sunday night. “They are phenomenal people!”
He added that he had hoped to talk to Twitter employees about the departures this week but “wanted to set the record straight now” because of “inaccurate press rumors.”
Twitter Chief Operating Officer Adam Bain and Chief Technology Officer Adam Messinger will be taking on additional responsibilities.
The company is expected to announce the appointment of two new members to its board of directors this week, one of whom is expected to be a “high-profile media personality,” according to reports.
Lien reported from San Francisco and Pierson from Los Angeles.
Times staff writer Samantha Masunaga contributed to this report.
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