Last week, Twitter announced that its CEO, Dick Costolo, has chosen to step down from the 1st July. Twitter co-founder Jack Dorsey will return to the fold as the interim CEO.
This change was initially responded to favorably, with Twitter’s share price rising by 7% in after-hours trading, before returning back down to 3%. This increase in share-price marks a drastic change from the situation six weeks ago when Twitter’s stocks plummeted by 18% after an earnings miss in Q1. User growth was up just 4.86% since the previous quarter to bring Twitter to 302 million users.
Costolo is said to have initiated internal discussions about the stepping down process at the end of last year. Since Costolo voluntarily stepped down, there will be no severance package.
Jack Dorsey, who founded Square in 2009, will stand as CEO until a replacement is found for Costolo. Dorsey was previously Twitter’s CEO until he was forced out and replaced in 2008 by Evan Williams.
In a statement to investors (in its entirety below), Costolo said:
“I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the Company. We have great leaders who work well together and a clear strategy that informs our objectives and priorities. There is no one better than Jack Dorsey to lead Twitter during this transition. He has a profound understanding of the product and Twitter’s mission in the world as well as a great relationship with Twitter’s leadership team. I am deeply appreciative of the confidence the Board, the management team and the employees have placed in me over the years, and I look forward to supporting Twitter however I can going forward.”
Costolo will be remembered at Twitter for many things, including a hugely successful time for Twitter’s monetization. However, a poor last-quarter performance proved to be too detrimental to Costolo’s tenure.
Two weeks ago, when asked if he was worried about the security of his job, Costolo replied “I don’t worry about that at all. The board and I are completely in sync. Believe me, I don’t worry about that at all.” This statement seems to reveal that the stepping down proceedings have materialised quicker than Costolo expected.
Despite being respected by employees and turning Twitter into a serious business, Costolo didn’t manage to extend Twitter beyond news junkies and public figures. Transforming Twitter into a service that the average person can love will be the challenge of the new CEO, whoever they might be.