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Are strain, stress at Twitter driving out top execs?

Sharon Gaudin | Dec. 22, 2016
Twitter's COO, CTO and a product VP are all heading out the door

Twitter had 317 million monthly active users as of the third quarter of this year, a drop from 320 million in the third quarter of 2015. In October, Twitter reported a net loss of $103 million, and said it would cut its workforce by about 9 percent. At the time, Twitter also announced it was closing Vine, its mobile video app.

A sale of Twitter was explored earlier this year, but several companies reportedly interested in in buying it, including Salesforce, Disney and Google parent Alphabet, all backed out.

"Over the last two years, Twitter has seen an incredible amount of executive turnover, beyond normal, said Patrick Moorhead, an analyst with Moor Insights & Strategy. "This has been driven by Twitter's lack of user and financial growth. Employees are working very hard and aren't willing to do that any more if they can't see confidence in a bright future. Jack is back, too, and any time a new CEO comes in, there will be turnover."

Ezra Gottheil, an analyst with Technology Business Research, added that there has to be a lot of pressure on Twitter executives from investors pushing the company for growth despite its lagging posture.

"That, in turn, drives a very unpleasant environment for everyone there, but especially management, and especially management who either don't need jobs or can find ones that are more fun," Gottheil said, noting that Messinger is leaving without having a job to go to and McFarland decided to leave for a company that has been chasing him for years.

"They wanted out," Gottheil said.

Jeff Kagan, an independent industry analyst, said the Twitter news this week is disturbing, but not shocking.

"I don't think this means there is any dire news at Twitter," he said. "This is just a personal choice. Some people like the battle of turning around a struggling company and others prefer to work at a current winner… It may be just that simple."

However, Rob Enderle, an analyst with the Enderle Group, finds the executive departures at Twitter troubling.

"These people are the ones in charge of driving Twitter's change, and their departure would indicate that they simply don't believe Twitter can be saved," Enderle said. That's "not a surprise given that Twitter's core problem is that the service doesn't lend itself well to advertising even though it has massive reach. Problems like bullying and fake news have started to erode trust in the service, suggesting it is trending in the wrong way, and execs appear to be leaving because they don't want to go down with the ship."

Regardless of what the departures suggest, losing top executives, who know the business, its strategy and its employees, has to be a blow to the company.

"This is like brain cancer," Enderle said. "You can't cut out a major portion of the brain suddenly, while already mortally ill, and think anything but that your survival chances just got a lot worse."


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