Last weekend marked more bad news for Twitter (TWTR) stock. An announcement by CEO Jack Dorsey on Twitter that four key executives were leaving adds to the company's growing list of departing executives and suggests the company's turnaround may not be gaining any meaningful moment yet. But could this misfortune help reinvigorate a new culture at the company as it attempts to transform its service into a mass-market product?
Twitter headquarters. Image source: Twitter.
Here's what investors need to know about the executive shakeup over the weekend.
The shuffle
Twitters heads of engineering, product, media, and human resources Alex Roetter, Kevin Weil, Katie Stanton, and Brian "Skip" Schipper are all leaving voluntarily, Jack announced last weekend in yet another tweet of a screenshot of far more than 140 characters.
"All four will be taking some well-deserved time off," Dorsey said. "I'm personally grateful to each of them for everything they've contributed to Twitter and our purpose in the world. They are phenomenal people."
Twitter CEO Jack Dorsey. Image source: Twitter.
While the executives may be leaving amid rough times, Dorsey was careful to note that the executives all played critical roles for the company. Alex and Kevin in particular helped oversee significant growth, he explained. Having been with the company for more than five years, they "scaled the ads, product, and engineering teams from producing near-zero revenue to the over-$2 billion run rate it is today," Dorsey said. He noted that Katie had also been with the company for over five years, helping to grow the company's global team and open Twitter international offices in Japan, the U.K., and Ireland, which are now Twitter's largest international offices.
The departing executives' roles will be taken over by Twitter COO Adam Bain and CTO Adam Messinger. In addition to his previous COO role, Bain will now oversee revenue-related product teams, the media team, and HR. Messinger will combine engineering and consumer product, design and research, user services, and Fabric into a single group.
Dorsey expressed his confidence in Messenger's important role:
Adam Messinger has been on my staff team for over four years and has led large teams both here and elsewhere. He has a very strong sense of how to bring our development together so we can continue to ship faster and produce strong work that people will love to use. And I will be partnering with him day and night to make sure we're building the right experiences.
A catalyst for a revamped culture?
It's probably not a good sign that these key Twitter executives are leaving. If the company's turnaround since Dorsey returned last year was going exceptionally well, chances are key executives would be more interested in sticking around. So, it does make sense that shares fell about 5% on Monday on the news. The executive exodus could signal that the chief concern among investors -- Twitter's slowing user growth -- isn't yet reversing.
But just because these executives aren't leaving on a positive note doesn't mean the shakeup won't be good for Twitter's long-term potential. With the company now seriously considering dropping its 140-character limit, and with Dorsey openly admitting he wants to completely transform the product into one that appeals to the mass market, big changes among leaders may be necessary to cultivate a new vision.
Ultimately, however, investors are going to need to see what Twitter's vision for a mass-market product looks like in action. Only execution will allow investors to judge whether or not a revised strategy can truly accelerate the company's user growth, which slowed to just 1% growth between Q2 and Q3.
With Dorsey now nearly four months into his permanent CEO role, and after some more key departures of Twitter executives, the pressure is as high as ever.
