In early 2016, I flew to San Francisco for a week of meetings with the top brass at Twitter. Jack Dorsey, one of the cofounders of the social media start-up, had recently returned to the company as CEO, taking over from Dick Costolo, who had taken Twitter public a couple of years earlier. This wasn’t the first time Dorsey had run Twitter. As I detailed in my book on the early days of Twitter, Hatching Twitter, Dorsey had served as CEO during the company’s nascent years, before being kicked out because he had no idea how to run a company. Evan Williams, Twitter’s other cofounder, took over. Dorsey, incensed by the fact that he had been ousted, then came back to oust Williams, and the CEO musical chairs went on for a decade until Dorsey again returned to lead Twitter during the Trump era. My question for the executives I was meeting with that year was simple: What happens if Dorsey was (once again) unsuccessful in growing Twitter to its full potential? Who would take over next? At the time I was told by the board of Twitter that “There is no plan B.” It was Jack Dorsey or bust.
On Monday, five years after that proclamation, Dorsey announced he was resigning from Twitter. Plan B, it turns out, is the company’s chief technology officer, Parag Agrawal. In a resignation letter, Dorsey said, “After almost 16 years of having a role at our company…from co-founder to CEO to Chair to Exec Chair to interim-CEO to CEO…I decided it’s finally time for me to leave.” But what changed? Why is Dorsey leaving now? Was he ousted? Or is he “resigning” of his own accord? The answer to those questions varies depending on who you ask.
I spoke to almost half a dozen people familiar with the company’s inner workings, and while they were not directly involved in Dorsey’s “resignation,” these are people who have a deep understanding of the place, and as such theorized that Dorsey is being ousted as CEO, rather than leaving of his own accord. (Twitter itself did not immediately respond to a request for comment.) In 2020, Elliott Management, a hedge fund known for activist investing that controls roughly $48 billion in assets, had purchased $1 billion of Twitter stock and began a campaign to demand changes at Twitter, with a specific goal in mind: getting rid of Dorsey. At the time, Dorsey refused to step down as CEO, using the argument that he was a founder of Twitter, and therefore the only person who could run it, according to people who were familiar with Dorsey’s thinking at the time. Earlier this year, in April, when it was announced that Elliott Management’s activist investor Jesse Cohn was planning to step down from the board of directors, it appeared that Dorsey had survived the Succession-like coup. I then heard rumblings from someone close to Twitter’s board over the summer that there was indeed a CEO search taking place at the company, but I had assumed at the time that it was just theater given that Dorsey has largely been unfireable for the past nearly 16 years, and has always managed to stave off attempts to expel him from the company. In May, Elliott Management increased its holding in Twitter, buying more than $200 million of stock when the company’s value fell by more than 15% following a sluggish earnings report. Looking back now, it appeared that Dorsey’s death knell had been rung.
While one former high-level employee at Twitter believes that Dorsey may have indeed decided to step down of his own accord, the employee acknowledged that his resignation was handled in a very peculiar way. Rather than have an overlapping transitionary period, where Dorsey trains his replacement, the switch is happening immediately, which the former employee said was very “weird.” For others, what’s most telling that Dorsey likely didn’t have much of a say in this matter is that he is not only stepping down as CEO, effective immediately, but that he is leaving the board of Twitter in May. In the past, when founders and CEOs step down, they often stick around indefinitely to help guide the direction of a company, given their own understanding of a business. Bill Gates remained on the board of Microsoft about 20 years after he resigned as CEO, and only left when the board opened an investigation into a prior romantic relationship he had with a Microsoft employee that was deemed inappropriate. Eric Schmidt and Larry Page, both of whom served as CEOs of Google, stayed on the board for some time after stepping down (Page is still on the board of Alphabet). Even Twitter’s cofounder, Evan Williams, remained on the board of Twitter for over a decade after he was pushed out by Dorsey. The problem with keeping Dorsey on the board now is that each time he has stepped down in a leadership role at the company in the past, and in turn stayed on the company’s board, he has managed to connive his way back to becoming CEO. The only true way to ensure that doesn’t happen again, one former employee theorized to me, is to cut him out of the company entirely.
Another person close to the company and to the board told me that the likely scenario of why Dorsey is leaving so abruptly is somewhere in the middle of a resignation and being forced out. “Two years ago, Jack was friends with everyone on the board,” this person said, and they weren’t going to do anything to hold him accountable for the company’s languid performance over the past few years. “I think it was a bit embarrassing for everyone when Elliott Management showed up and said it wasn’t acceptable for a public company of this size to not have a full-time CEO,” the person told me. “Two years later, and I think Jack knew that his performance as CEO wasn’t up to par, and that while he had held off being ousted before, he knew that it was only a matter of time before other investors, or his new board, would force him out as CEO.” In other words, Dorsey wasn’t pushed out at this very moment, but he saw the writing on the wall.
For Dorsey, leaving the company he has spent almost 16 years fighting tooth and nail to stay a part of might be the best thing that could happen to him—and to Twitter. Dorsey’s stature over the past five years has skyrocketed in both wealth and attention. When I first started covering him and the company, Dorsey lived in a tiny studio in the Mission district of San Francisco and was living paycheck to paycheck, barely able to afford new clothes. Now he’s worth nearly an estimated $12 billion, partially from his Twitter shares, his shares in Square, and Bitcoin acquisitions he has made over the years. He no longer socializes with subordinates at Twitter and Square, people he was friends with for many years, but is a part of the elite A-list celebrity set, going boating with Jay-Z and Beyoncé, or vacationing with Sean Penn and the Israeli venture capitalist Vivi Nevo in Hawaii. And his latest obsession seems to be with Bitcoin and cryptocurrencies, not necessarily the future of Twitter.