Dick Costolo will step down as Twitter’s chief executive on July 1, the company said Thursday. No successor has been chosen yet, but Jack Dorsey, Twitter’s co-founder and chairman as well as the CEO of mobile payments company Square, will serve as interim CEO during the search process. Costolo will remain on Twitter’s board of directors and Dorsey will keep his post at Square.
In a conference call Thursday evening, Costolo emphasized that he began discussing plans to step down with Twitter’s board late last year, and decided it would be best if he resigned ahead of the search. “I personally felt like the scrutiny of the company would intensify if I remained CEO while the search process was ongoing,” he said. “I felt like it would be a distraction for the company, and didn’t think it would be in anybody’s interest to have that distraction.”
“I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the company,” Costolo said in a statement announcing his departure. “We have great leaders who work well together and a clear strategy that informs our objectives and priorities.”
Investors might beg to differ. They’ve been calling for Costolo’s resignation for several months now, and have criticized him for tepid leadership and an apparent lack of vision. In November, the Wall Street Journal ran a brutal profile of Costolo that described him as “a reactive thinker who bounces from one idea to the next.” During his tenure, Twitter has bled top talent. Over the last year or so, the list of departures included Vice President of Product Michael Sippey, Creative Director Doug Bowman, Senior Vice President of Engineering Chris Fry, Chief Operating Officer Ali Rowghani, Vice President of Engineering Jeremy Gordon, and Head of News Vivian Schiller. Still, the announcement likely caught some off-guard. On Wednesday, Twitter co-founder Biz Stone dismissed rumors that Costolo would step down as “crazy.”
Twitter has tried to work through its identity crisis and management churn. In April, the company released a major homepage redesign intended to open its platform to the masses. Costolo has also adamantly maintained that certain metrics Wall Street traditionally uses to evaluate the success of social media companies—namely monthly active users—are not fair when it comes to Twitter, as tweets can reach far beyond people who have active accounts. In Costolo’s view, Twitter isn’t Facebook, and shouldn’t be measured like it either.
Dorsey told investors that he intends to “ensure the continuation of all the good work Dick and his team have underway” and that he doesn’t “foresee any changes in strategy or direction” for Twitter. In the chief executive search, Dorsey said the company will seek “someone who really uses and loves the product in every single way.”
Hopefully the person who fits that bill will also be able to improve Twitter’s lackluster financials. Since its public debut in November 2013, the company’s stock has lost 20 percent of its value. (It’s currently up 6 percent in extended trading on news of Costolo’s departure.) On top of that, when Twitter released its most recent earnings for the first quarter in late April it also lowered full-year expectations for 2015. Wall Street ran out of patience a while back. Now, it seems, the powers that be at Twitter have as well.
This post has been updated to include information from a conference call on Twitter’s CEO transition.