Linda Yaccarino steps down as CEO of X

Her departure caps a tumultuous run atop Elon Musk’s social media company and follows the merger of xAI with X.

Linda Yaccarino. Picture: Patrick T. Fallon / AFP

Linda Yaccarino said she is stepping down as chief executive of X, capping a tumultuous run atop Elon Musk’s social media company.

Ms Yaccarino’s future at the company had been uncertain for months. Mr Musk merged X with Grok chatbot maker xAI this northern spring, fusing two of his technology bets and making the social media platform part of a broader AI-focused company.

The high-growth potential of artificial intelligence became more important to investors than the tighter-margin social media business overseen by Ms Yaccarino.

When X hired the former finance chief of Tubi as the social media company’s chief financial officer late last year, Mr Musk and Ms Yaccarino often butted heads, people familiar with their relationship said.

Linda Yaccarino speaks onstage at the 2023 Code Conference. Picture: Jerod Harris/Getty Images for Vox Media

Reza Banki was a hire supported by Mr Musk and effectively replaced Ms Yaccarino’s previously appointed head of finance for the company. Mr Banki pressured Ms Yaccarino over costs, specifically over the money she was spending on content deals with celebrities for shows that appear on X, one of the people said.

Ms Yaccarino told people close to her that the recent return of some advertisers and the merger, which made X a smaller revenue contributor, made it a good time to depart. X is expected to see ad revenue growth for the first time since the takeover this year, according to research firm eMarketer.

“When @elonmusk and I first spoke of his vision for X, I knew it would be the opportunity of a lifetime to carry out the extraordinary mission of this company. I’m immensely grateful to him for entrusting me,” Ms Yaccarino wrote on X Wednesday.

She didn’t immediately respond to requests for comment. Mr Banki couldn’t immediately be reached for comment.

Ms Yaccarino took the helm of the social media platform, then called Twitter, in 2023, bringing decades of experience in the advertising world. She initially struggled with an exodus of advertisers concerned about content moderation on the platform under Mr Musk’s ownership as well as management turmoil.

Mr Musk and Ms Yaccarino strongarmed some brands to return to the platform by threatening legal action, The Wall Street Journal reported. Verizon Communications and Ralph Lauren are among the advertisers that resumed spending after receiving such threats.

Elon Musk kept significant control over the platform. He took the title of chief technology officer, while Linda Yaccarino oversaw X’s ad sales and day-to-day business operations. Picture: Getty Images via AFP

X is contending with fresh content moderation challenges, including recent episodes in which Grok posted racist and controversial comments in response to users.

xAI said on Tuesday it has “taken action to ban hate speech before Grok posts on X” after being made aware on Tuesday of a number of anti-Semitic posts. Several of the posts have been deleted. Mr Musk hasn’t directly addressed the most recent malfunction of the chatbot.

At 1.51am. local time, he posted from his X account, “never a dull moment on this platform”.

Rocky start

Mr Musk kept significant control over the platform. He took the title of chief technology officer, while Ms Yaccarino oversaw X’s ad sales and day-to-day business operations.

That often meant navigating life in his shadow, and cleaning up after the bombastic billionaire. At a conference in 2023, Mr Musk declared that advertisers pulling their ads from X could “Go f..k yourself”. The incident exacerbated tensions with many ad executives.

Asked about his outburst, Ms Yaccarino struck a different tone while also defending her boss. “I might have said it a different way, but the frustration was clear,” she said. “We’re not going to change our core values.”

Ms Yaccarino’s early projects at X included smoothing over a payment issue with Google and pushing Mr Musk to switch out the poop emoji the company had started using as a response to journalists, in exchange for a more cordial message. She also hired a new slate of senior sales executives, rebuilding the top ranks after a period of sweeping lay-offs and resignations.

She pushed X to launch more tools that would give brands control over the types of content that appeared near their ads, struck deals for video shows and encouraged more small businesses to advertise on X. She also renewed X’s partnership with the NFL in a bid to entice users and advertisers.

Signs of progress

Some of Ms Yaccarino’s strategy worked; X began to show some financial improvements at the start of this year.

In a presentation to investors, X reported 2024 adjusted earnings before interest, taxes, depreciation and amortisation of about $US1.25bn ($1.91bn) and annual revenue of $US2.7bn. While revenue is still down from before Mr Musk’s takeover of the company, X has been able to nearly double its profit since 2021.

xAI recently raised $US5bn from investors with the help of some of the biggest banks in the world, including Morgan Stanley and UBS.

Earlier this year, Ms Yaccarino was part of the company’s fundraising efforts, attending an investor presentation at Morgan Stanley’s headquarters to hype the company’s potential. She delivered pre-written remarks and shied away from direct questions from the audience, leaving those to the bankers running the deal.

The Wall Street Journal