Twitter CEO Dick Costolo has announced to step down from his position in the company, with effect from July 1, 2015. The company has released an official note on stating that though Costolo will step down as Twitter's CEO, he will continue to be a part of its Board of Directors. Co-founder and Square CEO Jack Dorsey will be at the helm as the interim CEO, till Twitter finds a suitable replacement.
The news has been well received by the stock market as Twitter's share price went up, marginally though. The company has recently been witnessing tough time due to drop in its financial performance and stock value in the market in the last few months. The company's last quarter earnings plummeted far below its expectations, due to which its stocks dropped by almost 25 percent in April. It recorded revenue of $1.4 billion in 2014, with loss of $578 million. Moreover, despite the 18 percent growth to 301 million monthly users, Twitter's user-base is far behind arch rival Facebook which has comparatively done extremely well, and has more appeal.
Costolo helped the company's valuation touch $23 billion in his tenure of five years as CEO. However, Costolo was facing the heat due to the recent slouch in the company's financial performance and mediocre user growth. It is believed that Costolo's decision to step down is voluntary.
After the company made an official announcement around this change, Costolo and Dorsey reached out to their employees via emails letters. Costolo mentioned in the email that he suggested the company's board to start hunting for the next lead last year.
Dorsey, on the other hand, mentioned about his major responsibilities ahead, which include building of best team dynamic to lead Twitter, to ensure endeavours prove helpful for the company, and to take their performance to another level.
Here are their official letters:
From: Dick Costolo
Date: June 11, 2015
For those of you who aren't able to attend the all-hands right now, you're missing one of my last Q&A sessions in the Commons. After about six years with the company, I've decided to step down as CEO effective July 1, and I am thrilled to say that Jack Dorsey will serve as interim CEO while the Board begins a search for our permanent CEO.
As I tell all of you and everybody else who will listen, we've never had a stronger team here or a more clear and cohesive strategy, and all of that is accompanied by a pace and quality of execution this year that's been a delight to see. So while there is never a perfect time for transitions like this, the stability and performance of the organization gives me confidence that this transition will be smooth.
Jack and I meet regularly and discuss the company, our products, and Twitter's future, and I assure you that during this time, there's no one better to help us stay focused and continue the momentum that we've all worked so hard to achieve.
Today's announcement is the culmination of a great deal of careful deliberation and discussion with the Board. Last year, after more than five years with the company, I suggested to the Board that we focus on succession planning and finding the next person to lead while also making sure we had a team that worked well together before embarking on a process. We have agreed that we should announce the search now in the clear light of day so it can be conducted out in the open. To ensure continuity and stability through the transition and eliminate the distractions that would arise if I were to stay on through the search, we have decided to simply remove a layer of management and ask Jack, our Chairman, to lead. Nobody has deeper roots at Twitter. Jack will ensure the Board can undertake a thorough search without disrupting the business, as we stay focused on our strategic goals and priorities. While Jack will continue to serve as CEO of Square, he will benefit from the exceptionally strong leadership team here. I know I can count on each of you to lend him your full support.
As for me, I'll serve as CEO for the next few weeks to ensure a smooth hand-off to Jack. After that, I will remain on the Board of Directors, and I look forward to continuing to contribute to Twitter's exciting future. I'm particularly excited about the product work that we'll unveil this fall, and I'd like Kevin Weil and the C&D team to note that i didn't mention a specific date here. You're welcome.
Our greatest competitive advantage is all of the extraordinary people who work here, and it makes my heart full to reflect on the delight I've had working with you. Along the thrilling road we've traveled, I've witnessed monumental personal and professional commitment, sacrifice, trust, and passion. We have a strong foundation in place with a very clear strategy, objectives and priorities; a talented leadership team to help us navigate change; and the inventor of the product and co-founder who is eager to continue executing on our vision.
This news will certainly generate media attention, which will be a first for us, so just be prepared for that because i know it will be a new experience. Remember that the external noise is just that, noise. Continue to focus and execute against the strategy and everything will fall into place. If a member of the media or anyone else outside the company contacts you about today's announcement, please just give them my home address and ask them to pop by anytime or refer them to the communications team.
From: Jack Dorsey
Date: June 11, 2015
Hello! I hope to be able to say that to each of you in person.
As you all read in Dick's note, at his request the board is starting a search for Dick's successor and I am stepping in to help guide that to an outcome that makes us all proud.
I am here to serve all the people and organizations that use Twitter, you and our leadership team, and our shareholders. I am not here to change our direction or strategy.
Let me repeat that: I am not here to change our direction or strategy. I'm excited and inspired by it! And even more so by the team that works tirelessly to see it through. And Dick is entirely to thank here. I respect and admire what he's selflessly built and assembled. My job is to work with all of you to continue to make that better and better.
I have 3 responsibilities ahead of me:
1. Build the best team dynamic to lead Twitter.
2. Ensure decisions are being made in service of our purpose.
3. Constantly raise the bar of our performance.
And that's what you should all hold me accountable to. My time here will be focused entirely on working with and through OpComm. You should expect to see me around the SF office a lot. Please say hi!