Twitter Inc . said Monday that Chief Executive Officer Jack Dorsey is stepping down, a departure driven in part by investors uncomfortable with his roles running two large, publicly traded companies, according to people familiar with the matter.

The Twitter co-founder, one of Silicon Valley’s most prominent figures, is also CEO of digital payments company Square Inc. His split duties and outside hobbies have long drawn criticism, and last year activist investor Elliott Management Corp. pushed for changes at Twitter, including potentially adjusting Mr. Dorsey’s role, the people said.