Facebook's shares were down 2.4% at $161.51 in early trading yesterday, knocking more than $11bn off the stock's market value.
"Mike and I are grateful for the last eight years at Instagram and six years with the Facebook team", Systrom writes in an announcement. Shortly after the news broke, Systrom confirmed his and Krieger's departure on the Instagram blog. "Kevin and Mike are extraordinary product leaders and Instagram reflects their combined creative talents", wrote Zuckerberg.
Following the statement, Facebook chief executive Mark Zuckerberg said he "really enjoyed" working with the Instagram founders.
Why are the Instagram founders leaving?
"Instagram is one thousand percent better than what it started as because of the monetization skills brought by Facebook and the competition with Snapchat".
Systrom and Krieger met through Stanford University and worked separately in Silicon Valley before forming Instagram in 2010.
Social media giant Facebook, Inc.
Instagram and Facebook have operated independently and the two services barely mention each other.
Having the Instagram founders walk out the door - shortly after the WhatsApp founders grew frustrated and did the same - does not project the image of a Facebook on sure footing.More news: Kavanaugh Denies Second Sexual Misconduct Allegation
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But Zuckerberg's restraint appears to have waned.
Mr Koum's departure sparked an executive reshuffle that saw the tightening of Mr Zuckerberg's control over operations.
Facebook's acquisition of Instagram for $1 billion remains one of the biggest steals in tech history.
Increased advertising on Instagram has seen the average price-per-ad across Facebook's apps decline this year after a year of upswing.
As such, he thinks Facebook would be wise to reassure users that what they love about Instagram isn't going to change - that they are not going to be forced to integrate with Facebook. "Since Facebook acquired Instagram in 2012 the platform has gone from strength to strength", says Ben-Itzhak.
Given Facebook's slowing growth and newer challenges, the company's leadership saw Instagram as the next obvious golden goose.
Instagram, meanwhile, has remained a bright spot for the company. Facebook's main app has been marred by scandals around privacy, the Cambridge Analytica issue, and the spread of fake news. Crucially, Instagram is popular with teens and young people, a demographic Facebook has had trouble keeping.
The Instagram news feed, once a selective platform for glossy magazine-like ads for marquee brands, expanded its offering over the years to more advertisers, adding video and "shoppable" formats, where users can immediately click to buy items.
The optics are bad, first off. Facebook is trying to project confidence that it's moving past its two years of near constant crises involving foreign propaganda infecting the social network, of people and government officials using Facebook and its WhatsApp app to incite violence, and realisations stemming from this year's Cambridge Analytica scandal that Facebook may not be worthy of people's trust with their private time and digital lives.