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Twitter management departures unnerve investors

People holding mobile phones are silhouetted against a backdrop projected with the Twitter logo in this illustration picture taken in Warsaw September 27, 2013.

Reuters/Kacper Pempel/Files

An exodus of top Twitter Inc executives has raised concerns about the company’s plans to win more users.

Media head Katie Jacobs Stanton, product head Kevin Weil, the head of the engineering division, Alex Roetter and HR head Brian “Skip” Schipper will all leave the company, Chief Executive Jack Dorsey tweeted on Sunday night.

At least one of those executives was fired, the New York Times reported, citing people familiar with the matter.

Jason Toff, who heads Twitter’s video streaming service, Vine, also tweeted that he was also leaving Twitter to join Google to work on virtual reality.

Dorsey’s tweet did not mention him.

Twitter’s shares were down 5.3 percent at $16.90 in premarket trading.

“While we may not be the sharpest tools in the shed, we don’t see how the departure of the heads of three major business divisions can be viewed as a positive in the middle of an attempted business turnaround,” Stifel analysts wrote in a note.

The brokerage downgraded the stock to “hold” from “buy”.

Twitter currently has just over 300 million users, but its user growth in 2015 was the slowest in its history.

Twitter may announce other executive changes, including the recruitment of a new chief marketing officer (CMO), on Monday, according to a source familiar with the matter. The company will announce two new board members soon, the person added.

The new CMO could be Leslie Berland, currently an executive vice president at American Express, tech news website Re/code reported, citing sources. (on.recode.net/23nIuq2)

American Express declined to comment, while Twitter was not immediately available for comment.

Dorsey, who became Twitter’s permanent CEO in October, has been trying to ignite growth by restructuring the company and launching new products.

He has launched Moments, which showcases Twitter’s best tweets and content; laid off more than 300 employees; given a third of his stock to employees; and hired former Google executive Omid Kordestani as executive chairman.

“While we never like to see executive turnover and one could infer that there are product and media concerns in the short term, we continue to think that long term Twitter presents an interesting opportunity for investors,” SunTrust Robinson Humphrey analysts wrote in a note.

The brokerage cut its price target on Twitter’s stock to $26 from $34.

Dorsey said Chief Operating Officer Adam Bain will take on additional responsibilities as a result of the departures, including revenue-related product teams and the HR team.

Chief Technical Officer Adam Messinger will handle the engineering team, he said.

Twitter shares lost a third of their value in 2015.

(Reporting by Supantha Mukherjee and Lehar Maan in Bengaluru; Editing by Ted Kerr)

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