Jack Dorsey is stepping down from his role as Twitter chief executive officer and Chief Technology Officer Parag Agrawal will now lead the company, the social networking site announced on Monday. 

The appointment of Agrawal, a 10-year Twitter veteran, signaled a tacit endorsement by the board of a strategy the company previously laid out to double its annual revenue by 2023, even if investors were not so sure. 

The CEO change is effective immediately and Dorsey will remain on the board until his term expires at the 2022 annual shareholder meeting, the company said. 

In an email to employees on Monday, Dorsey stressed the decision was his own. "I'm really sad ... yet really happy," he wrote. "There aren't many companies that get to this level." 

"We recently updated our strategy to hit ambitious goals, and I believe that strategy to be bold and right," Agrawal said in an email to employees. "But our critical challenge is how we work to execute against it and deliver results." 

Twitter shares surged nearly 10 percent after the announcement and closed down 2.7 percent. 

Its shares have slumped in recent months, adding pressure on Dorsey to end his unusual arrangement of being CEO of two public companies – Twitter and his payments company Square. 

In early 2020, Dorsey faced calls from Elliott Management Corp to step down, after the hedge fund argued that he was paying too little attention to Twitter while also running Square. 

In a joint statement issued after the announcement, Elliott Managing Partner Jesse Cohn and Marc Steinberg, a senior portfolio manager, endorsed the baton passing.  

"We are confident that they [Agrawal and Taylor] are the right leaders for Twitter at this pivotal moment for the company." 

Dorsey, who co-founded Twitter in 2006, is leaving after overseeing the launch of new ways to create content through newsletters or audio conversations, and will focus on leading Square and other pursuits such as philanthropy, according to Reuters. 

Over the past year, Twitter has fought to end years-long criticism that it has been slow to introduce new features for its 211 million daily users and was losing ground to social media rivals like Instagram and TikTok. 

(With input from Reuters)