A major reorganization is afoot at TikTok parent company ByteDance as it plans to create six business units, while the video app’s chief executive Shou Zi Chew will step down from his dual role as ByteDance CFO to run TikTok full time, marking the latest Chinese tech reshuffle against a backdrop of mounting scrutiny from Beijing.
Chew will continue only as CEO of the popular short-form video app, ByteDance CEO Liang Rubo told employees in an internal memo confirmed to Forbes.
The Facebook and Xiaomi alum joined ByteDance as its first ever chief financial officer in March and succeeded Kevin Mayer as TikTok CEO in May.
He had been tipped to lead ByteDance to an IPO in New York or Hong Kong this year, before the plans were suspended amid a regulatory crackdown on Chinese tech firms.
More widely, ByteDance is splitting off into six business units, the memo reportedly details, including TikTok; its Chinese equivalent Douyin and work collaboration platform Lark.
Data intelligence unit BytePlus, gaming publisher Nuverse, and education tech platform Dali make up the remaining three units, according to the report.
ByteDance is one of a slew of Chinese corporate giants targeted by the Chinese government which seeks to rein in the power of the likes of Alibaba, Tencent and Didi. The crackdown put the nation’s once feted tech executives on the backfoot and have signaled to investors and entrepreneurs that loyalty to the ruling Communist party outweighs commercial success and innovation. Among the high-profile casualties are Alibaba and Tencent, both of which have minted some of China’s richest billionaires including Jack Ma and Ma Huateng, but in recent months have had hundreds of billions wiped off their value.
Prompted by antitrust and national security concerns, lawmakers passed a bill restricting companies’ handling of user information that came into effect this month and forces firms to ask users’ permission before collecting data such as their location or financial information. Chinese regulators have issued huge fines for antitrust violations that force businesses to sell on one platform over others, while Beijing ordered a review of ride-hailing giant Didi’s data handling practices in July, not long after the company’s blockbuster $4.4 billion IPO in New York. The crackdown also effectively squashed the nation’s booming private tutoring industry after banning foreign investment and for-profit activity in the sector, a move that slashed the value of private education firms—along with the fortunes of their billionaire executives.
What To Watch For
1 billion. That’s how many active users TikTok counted as of September. The milestone, achieved within just five years of the app being founded, makes it one of the fastest-growing social media platforms, ever.
China’s ByteDance aims for Hong Kong IPO despite tech crackdown (Financial Times)
Meet TikTok’s Singaporean CEO, Shou Zi Chew, the Harvard graduate who even helped start Facebook (South China Morning Post)