Jack Dorsey Steps Down as Twitter CEO

Twitter CEO Jack Dorsey to Step Down, Parag Agrawal to Take the Helm

Reports surfaced this morning, as detailed by CNBC, indicating that Jack Dorsey is anticipated to relinquish his position as CEO of Twitter. These reports were quickly substantiated by Dorsey himself, followed by an official press release from Twitter containing further specifics.

Succession and Board Changes

Parag Agrawal, who initially joined Twitter as an engineer in 2011 and subsequently held the role of Chief Technology Officer since 2017, has been designated as Dorsey’s replacement.

In a communication to Twitter personnel, also shared publicly on the platform, Dorsey expressed his views on founder-led companies. He stated, “I believe that a strong reliance on a founder’s leadership can be restrictive and create a single point of vulnerability. My efforts have been focused on enabling the company to operate independently of its origins and founders.”

Dorsey currently serves as CEO of both Twitter and Square, a financial services company providing payment solutions, cash management, and funds transfer services to both individual and corporate clients.

Twitter has announced that Dorsey will remain a member of the Board of Directors until the conclusion of his term at the 2022 stockholders’ meeting. Concurrently, Bret Taylor, currently the President and COO of Salesforce, has been appointed as the new Chairman of the Board, succeeding Patrick Pichette, who will continue serving on the Board and chairing the Audit Committee.

Dorsey’s Rationale and Square’s Status

Dorsey highlighted Taylor’s appointment to the board as a key factor in his decision to step down, emphasizing Taylor’s understanding of “entrepreneurship, risk-taking, large-scale companies, technology, product development, and engineering principles.”

The company affirmed that these leadership transitions will not impact its previously communicated projections for the fourth quarter and the entirety of 2021, nor will they alter its objectives for 2023.

Initial market reaction saw Twitter’s stock price increase following the news of Dorsey’s potential departure, climbing 6.1% during the early hours of trading. Update: As of 12:43 ET on Monday, Twitter shares are now trading relatively flat, experiencing a slight decrease of 0.13%. 

Financial Context

Currently, Twitter’s market capitalization is approximately $40 billion. While a substantial figure, it remains less than half the valuation of Square, which is valued at just over $99 billion.

The management of a single public company presents significant challenges. Overseeing two such entities is considered unusual and undoubtedly complex. Square has confirmed to TechCrunch that Dorsey’s role within the company remains unchanged, with no alterations to leadership, strategy, or financial forecasts.

Dorsey’s Statement and Confidence in Agrawal

“This decision is mine, and I fully accept responsibility for it,” Dorsey communicated to his team. “It is rare for founders to prioritize their company over personal ambition. I am confident that this transition will prove to be the correct course of action.”

He expressed profound trust in Parag Agrawal’s capabilities as Twitter’s CEO, stating, “His contributions over the past decade have been transformative. I am immensely grateful for his dedication, integrity, and passion. Now is the appropriate time for him to lead.”

Parag Agrawal’s Background and Vision

Throughout his tenure at Twitter, Agrawal has been instrumental in shaping the company’s technical strategy and accelerating development processes. He has also been a driving force in advancing machine learning applications within the platform.

Prior to his appointment as CTO, Agrawal was recognized as Twitter’s first Distinguished Engineer, acknowledging his significant impact on revenue and consumer engineering, including his role in revitalizing audience growth in 2016 and 2017.

Agrawal holds a Ph.D. in Computer Science from Stanford University and a Bachelor’s Degree in Computer Science and Engineering from the Indian Institute of Technology, Bombay.

Agrawal’s Response and Future Outlook

“I extend my gratitude to the Board for their confidence and to Jack for his ongoing guidance, support, and collaboration,” Agrawal stated. “I am eager to build upon the achievements under Jack’s leadership and am enthusiastic about the opportunities that lie ahead. By enhancing our execution, we will deliver substantial value to our customers and shareholders while redefining the landscape of public conversation.”

Agrawal also shared his email to the Twitter team via a tweet, reaffirming his commitment to executing the company’s strategy and achieving its ambitious goals. He acknowledged that the company will face challenges in refining its operational approach to deliver results. An all-hands meeting with a Q&A session for employees is scheduled for Tuesday.

Positive Trajectory in Twitter's Product Development

Historically, Twitter’s leadership and its strategic product roadmap have faced scrutiny, often perceived as overly cautious or lacking in speed – sometimes both. However, recent performance indicates a significant acceleration in Twitter’s capacity to innovate and launch new products and services.

For a considerable period, the core functionality of Twitter experienced limited evolution, with the expansion of tweet length being a notable exception. Nevertheless, the platform has recently unveiled a substantial number of new features and completed several strategic acquisitions.

Twitter joined the live audio conversation with the introduction of Spaces, and subsequently implemented monetization options such as Ticketed Spaces, the Tip Jar feature, and live shopping integration. This mirrors a similar trend observed in Meta’s applications, including Facebook and Instagram, which have also increased their focus on e-commerce capabilities.

Furthermore, the platform launched Twitter Blue, a subscription service designed to provide users with a more personalized experience – including the ability to retract tweets – at a cost of $2.99 monthly.

The company has also actively invested in acquisitions to enhance its service offerings. This year, Twitter acquired Threader, contributing to the improved thread reading experience within Twitter Blue, Sphere, a group messaging application, Breaker, which aided in the development of Spaces, and prominently, Revue, a newsletter platform enabling writers to seamlessly link their content to their profiles.

Jack Dorsey’s well-known interest in cryptocurrency – evidenced by his Twitter bio consisting solely of “#bitcoin” – is not unique within the company. Twitter has been exploring methods for users to showcase NFTs on their profiles. Moreover, the platform is home to Bluesky, a project focused on decentralized web technologies.

Dorsey’s exit is unlikely to impede Twitter’s progress in the crypto space, particularly following the announcement of a dedicated cryptocurrency team. Twitter communicated to TechCrunch that Parag Agrawal would collaborate with this team to shape the future of cryptocurrency integration within Twitter, furthering the company’s ambition to decentralize social media through blockchain technology.

A response to a request for additional commentary was not immediately received.

Updated November 29, 2021, 11:00 AM EST to reflect confirmation of Jack’s departure and details regarding his replacement.