SAN FRANCISCO (AP) — Twitter’s chief executive fired two top executives, froze most new hires and said he was cutting expenses Thursday as the social media company tries to change its business trajectory as it grapples with the acquisition of Elon Musk, the richest man in the world.
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 cutting discretionary spending, though it wasn’t planning layoffs. The moves were in part because Twitter missed audience and revenue growth targets, Agrawal wrote.
Kayvon Beykpour, Twitter’s general manager, and Bruce Falck, chief revenue officer, are leaving, the memo says. Mr. Beykpour is being replaced by Jay Sullivan, the interim general manager of consumer products, the memo says.
“Having the right leaders at the right time is critical,” Agrawal said in the memo. He added that Twitter had decided at the start of the pandemic in 2020 to aggressively invest in growth, but “as a company we haven’t reached intermediate milestones that would allow us to be confident in these goals.”
Beykpour and Falck said on Twitter that Agrawal had fired them. Falck later appeared to delete his tweet.
Brian Poliakoff, a Twitter spokesman, confirmed Agrawal’s memo and changes. He declined to comment further.
The truth is that this was not how or when I imagined leaving Twitter, and it was not my decision. Parag asked me to leave after telling me that he wants to take the team in a different direction.
— Kayvon Beykpour (@kayvz) May 12, 2022
The changes raise questions for Musk about his $44 billion deal to buy Twitter. The billionaire, who has said he doesn’t care about the company’s economics, is paying $54.20 per share of the company. In a speech to investors, he also said he wants to quintup 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 shares of Twitter have been sinking, part of a broader pullback in tech stocks, and were hovering around $45.22 on Thursday. Mr. Agrawal’s moves also indicate that the company’s business, which relies heavily on digital advertising, is in trouble. Last month, Twitter reported quarterly revenue and earnings growth 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 University School of Law who focuses on corporate mergers, referring to the board on Twitter. “The idea that the board could reasonably come up with a price of $54 on its own was moot before they accepted the offer, but clearly now, it’s not going to happen any time soon.”
Musk, who also runs electric car maker Tesla and rocket company SpaceX, did not immediately respond to a request for comment. He has said that he will take Twitter private and wants to improve the product. He has also publicly criticized some of Twitter’s top executives, especially for the way they have moderated speech on the service. The billionaire, who is still seeking some financing for the purchase, is expected to close the deal on Twitter in the coming months.
Musk could back out of the deal, but would have to pay a $1 billion breakup fee. And as long as its debt financing for the acquisition remains intact, Twitter could take Musk to court to force him to pay the deal.
Agrawal, who was named chief executive of Twitter last November, has made a number of changes at the company and has fired some long-time executives. That same month, for example, the company’s head of communication left and her people manager said that she would leave at the end of the year. In December, Twitter’s head of engineering and head of design and research left.
As Agrawal attempts to reform the company, Twitter has been in an uproar over Musk’s takeover. At a company meeting the day the deal was announced, Agrawal fielded questions about how the deal came to be, what would happen to employee compensation and jobs, and how Musk could change Twitter.
“Some of you are worried, 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 which direction this company is going to go.”
In his Thursday memo, Agrawal did not mention Musk by name, but acknowledged that the company was in the midst of an acquisition and was unclear when it would close.
It’s unclear how long Agrawal will be in charge of Twitter. Musk has floated the idea of becoming the temporary CEO of the company once the deal is complete.
Last week, at another company meeting, Sullivan, the new CEO, told Twitter employees to stay motivated and keep working, despite the uncertainty caused by Musk, according to audio of the meeting obtained by Twitter. TheTimes.
“We can be private, we can be public, we can have an owner who wants to do something different,” Sullivan said. “We don’t know what the future will bring, but what we will know is that we leave it all on the field for the people who trust us every day.”
Mr. Sullivan also made a candid assessment of Twitter’s weaknesses, saying that the company had failed to retain new users and that employees had passed on the responsibility of fixing difficult problems. He said machine learning, which is a type of artificial intelligence, was important to Twitter’s growth. He also warned that Twitter’s content moderation policies could become more flexible.
“Social media is in a crisis of confidence right now,” Sullivan said.
kate conger Y Lauren Hirsch contributed report.