The social media giant lost five top executives in one fell swoop Sunday, casting further doubt over a company that has struggled to become profitable or more appealing to users.
Twitter stock, which lost more than half its value last year, promptly fell 4.6 percent to close at about $17 Monday. Some pundits and bloggers took it as a sign the end could be near.
But analysts say CEO Jack Dorsey might be playing a long game, gambling the company’s short-term reputation to set Twitter up for big breakthroughs six months to a year out.
“It’s hard to put a positive spin on top-tier executives departing any organization,” Axiom analyst Victor Anthony said. “But the upshot here is this is Jack Dorsey’s putting his footprint on the company. It’s not something that’s going to make a change tomorrow, but long-term, this could be the moment you look back on and say that’s when Twitter began to turn around.”
Though they are among the most significant departures Twitter has seen since Dorsey retook the helm of the company in October, this week’s upheaval is not surprising for those familiar with Dorsey’s leadership.
When Dorsey took over in October, he promised big changes and fresh ideas. A week later, he fired more than 330 employees, about 8 percent of the workforce.
This week, Twitter bade farewell to engineer executive Alex Roetter, product leader Kevin Weil, media head Katie Jacobs and human resources vice president Brian Schipper — who will all be “taking some well-deserved time off,” Dorsey wrote in his tweet.
Dorsey said all four left of their own accord, though analysts speculated it was amid pressure to quit or be fired.
Those four employees were appointed under former CEO Dick Costolo and responsible for several divisions that Twitter has struggled to reform, experts said.
“The timing is not a coincidence,” Wedbush analyst Michael Pachter said. “They were most likely pushed out, but those divisions were underperforming. It might look bad now, but it’s entirely possible Jack is doing everything right and has a vision that he just hasn’t bothered to share with everyone.”
Jason Toff, the general manager of Vine, was not mentioned in Dorsey’s note, but announced Sunday that he, too, was leaving. Toff is moving to Google to work in its virtual reality division.
All told, more than 60 percent of the executives present at Twitter’s most recent analyst day in November 2014 are no longer at the company.
Twitter is scheduled to report its quarterly earnings to investors on Feb. 10.
Since Dorsey’s return, Twitter has introduced a news aggregation service called Moments, launched a television ad campaign and batted around the idea of expanding tweets from their iconic but arbitrary 140-character limit — all efforts to increase its count of monthly active users, which has flatlined around 320 million.
Results have been mixed.
“If you’re invested in Twitter, you need to be prepared to be patient,” Anthony said. “You need to be prepared to wait.”
Dorsey, analysts said, has given himself an opportunity to institute meaningful change — if he picks the right people to fill vacant slots. In the short term, Chief Operating Officer Adam Bain will expand his role and oversee revenue-related product teams and human resources. Technology head Adam Messinger will oversee all engineering and consumer product, design, research and user services teams on an interim basis.
Twitter hasn’t yet named names, though Leslie Berland, a marketing executive at American Express, is widely rumored to be the next in line to take over Twitter’s media division.
Twitter will also seek external candidates to bring new perspectives to two new positions on Twitter’s board of directors, Dorsey said. One of them, according to anonymous reports to Recode and the New York Times, will go to a high-profile media personality.
“Twitter’s biggest issue right now isn’t departures, it’s user growth,” Pachter said. “Dorsey gets this. He is not a dumb man. He knows what he has to do. So getting rid of his four lieutenants was probably the right thing to do.”
©2016 the San Francisco Chronicle Distributed by Tribune Content Agency, LLC.
