SAN FRANCISCO — Twitter’s chief executive fired two top executives, froze most new hires and said he was cutting spending on Thursday, as the social media company tries to change its business trajectory while struggling with a grip control of Elon Musk, the richest man in the world.
In a memo shared with employees and obtained by The New York Times, Parag Agrawal, chief executive of Twitter, said the company was suspending most hiring and cutting discretionary spending, though it did not anticipate layoffs. The moves stemmed in part from Twitter not meeting its goals for audience and revenue growth, Agrawal wrote.
Kayvon Beykpour, Twitter’s chief executive, and Bruce Falck, chief revenue officer, are leaving, the memo says. Mr. Beykpour is being replaced by Jay Sullivan, acting 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 decided at the start of the pandemic in 2020 to invest aggressively in growth, but “as a company, we haven’t reached intermediate milestones that allow us to have 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 spokesperson, confirmed Mr. Agrawal’s memo and changes. He declined to comment further.
The changes raise questions for Mr Musk over his $44 billion deal to buy Twitter. The billionaire, who said he doesn’t care about the economics of the company, is paying $54.20 per share for the company. In a speech to investors, he also said he wanted to quintuple Twitter’s revenue by 2028 and grow its users to 931 million by then, from 217 million at the end of last year.
But shares of Twitter fell, part of a broader pullback in tech stocks, and hovered at $45.22 on Thursday. Mr. Agrawal’s moves also signal that the company’s business, which relies primarily on digital advertising, is struggling. Last month, Twitter reported quarterly revenue and profit growth that was lower than Wall Street had expected.
“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 who specializes in corporate mergers, referring to the Twitter board. “The idea that the board could reasonably come up with a price of $54 on its own was debatable before accepting the offer – but it’s clear now that it won’t happen in the short term.”
Mr Musk, who also heads electric car maker Tesla and rocket company SpaceX, did not immediately respond to a request for comment. He said he would take Twitter private and wanted to improve the product. He also publicly criticized some of Twitter’s top executives, particularly for the way they moderated speech on the service. The billionaire, who is still awaiting financing for the purchase, is expected to close the deal for Twitter in the coming months.
Mr Musk could walk away from the deal but would have to pay a $1 billion break fee. And as long as its debt financing for the acquisition remains intact, Twitter could take Mr. Musk to court to force him to pay for the deal.
Mr Agrawal, who was named chief executive of Twitter last November, made a series of changes within the company and fired some longtime executives. That same month, for example, the company’s communications manager left and her people manager said she would be leaving by the end of the year. In December, Twitter’s head of engineering and head of design and research left.
As 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 was struck, what would happen to pay and jobs employees, and how Mr. 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 is affecting all of you personally,” he said at the time. later added, “Once the deal is done, we don’t know which direction this company will go.”
In his Thursday memo, Mr. Agrawal did not mention Mr. Musk’s name, but acknowledged that the company was in the midst of an acquisition and did not know when it would close.
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It is 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 done.
At another company meeting last week, Mr. Sullivan, the new chief executive, told Twitter employees to stay motivated and keep working, despite the uncertainty caused by Mr. Musk, according to audio of the meeting obtained by The Times.
“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 holds, but what we do know is that we left everything on the pitch for the people who rely on us on a daily basis.”
Mr. Sullivan also gave a candid assessment of Twitter’s weaknesses, saying the company had failed to latch on to new users and that employees had passed on the responsibility of resolving difficult issues. He said machine learning, which is a kind of artificial intelligence, was important for Twitter’s growth. He also warned that Twitter’s content moderation policies could become more flexible.
“Social media is going through a crisis of confidence right now,” Sullivan said.
Kate Conger and Lauren Hirsch contributed report.