Yaccarino’s Break From Musk Was Months in the Making

Behind the confident presentations was an executive who had navigated a turbulent two years as chief executive of Elon Musk’s X. Through charm offensives and, in some cases, legal threats, Yaccarino stabilized a bruised business just in time for Musk’s merger of X with his xAI. More recently, the platform has faced self-inflicted content-moderation problems from xAI’s Grok chatbot.

On Wednesday, Yaccarino posted on the social-media platform that she is stepping down.

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. Current and former employees say her position at the company appeared increasingly tenuous after clashes with management.

Her tenure was marred by her boss’s erratic behavior, which often made it harder to bring back the very advertising customers she was hired to woo. She was effectively demoted in X’s merger with xAI. 

It is unclear who might succeed Yaccarino if X decides to replace her. Contenders could include members of Yaccarino’s leadership team, such as John Nitti, global head of revenue operations and ad innovation at X; Angela Zepeda, X’s global head of marketing; or Monique Pintarelli, head of Americas at X, industry insiders said.

It is vital that “any replacement for Linda will have to have credibility with advertisers,” said Michael Kassan, an ad and media consultant. 

Yaccarino, a spokeswoman for X and representatives for Musk didn’t respond to requests for comment. 

Luring back advertisers

Nicknamed the “Velvet Hammer” during her 12 years at NBCUniversal, Yaccarino earned a reputation as a hard-charging executive with networking and negotiating chops. Joining what was then called Twitter offered her a CEO role and a high-profile position in Musk’s constellation of technology businesses.

Her primary task was to lure back marketers who paused spending because they feared Musk would weaken content moderation. She also smoothed out a payment issue with Google, hired a new slate of senior sales executives and pushed X to create more tools that let brands control the types of content that appeared next to their ads.

Musk’s and Yaccarino’s styles were sometimes at odds. The billionaire preferred his team to communicate in quick-fire bulleted emails or Signal messages and would get frustrated at Yaccarino’s polished presentations and emails, according to people familiar with the situation. 

He at times undermined her efforts. At a conference in 2023, Musk declared that advertisers pulling their ads from X could “Go f— yourself.”

She and Musk schmoozed with advertising bigwigs on a yacht along the French Riviera the next year in an effort to better relations with them, according to people familiar with the situation. 

When X hired Reza Banki, the former finance chief of Tubi, as its finance chief in the fall, he and Yaccarino often butted heads, people familiar with their relationship said.

Banki was a hire supported by Musk and effectively replaced Yaccarino’s previously appointed head of finance for the company. Banki questioned Yaccarino on costs, specifically the money she was spending on content deals with celebrities for shows that appear on X, one of the people said. Banki didn’t respond to requests for comment.

Pushing for progress

Musk put pressure on Yaccarino last year to turn around the advertising business faster, according to people familiar with the situation. 

Advertisers began to return late last year, but Musk wanted faster progress. He told staff in January that he didn’t think the company was on solid financial ground.

“Our user growth is stagnant, revenue is unimpressive, and we’re barely breaking even,” he said in an email to employees, The Wall Street Journal previously reported. Musk denied sending the email.

Stabilizing X’s finances was crucial to the recent merger of X and xAI. After a series of fundraising transactions during the winter, X’s value had recovered from an estimated $10 billion to about $44 billion—just north of how much Musk had bought Twitter for in 2022. The new valuation, buttressed by the improvement in ad revenue, signaled that X’s original investors hadn’t lost any money they had put in alongside Musk.

Less than a month later, X said that it was merging with xAI. The deal moved the company closer to Musk’s goal of turning X into an “everything app,” where people can share news, pay their bills and entertain themselves.

After the deal, Yaccarino’s presence in front of investors started to diminish. She wasn’t part of xAI’s recent bout of fundraising, led by Morgan Stanley, and xAI executives instead presented the company’s growth plan to investors, a person familiar with the matter said.

Recently, content-moderation issues have resurfaced, this time caused by xAI’s own chatbot, which is embedded in the platform and can be used to respond to or fact-check posts. Grok on Tuesday published a number of antisemitic posts, its second flurry of controversial responses to users in recent months.

XAI said it is “actively working to remove the inappropriate posts” and had taken action to “ban hate speech before Grok posts on X” after being made aware of the posts.

Write to Suzanne Vranica at Suzanne.Vranica@wsj.com, Alexander Saeedy at alexander.saeedy@wsj.com and Jessica Toonkel at jessica.toonkel@wsj.com