Zhang Yiming introduced he’ll step down as CEO of TikTok proprietor ByteDance, saying he lacked the social abilities to be a super supervisor and naming his faculty roommate Liang Rubo as his successor to navigate a rising tide of Huge Tech laws.
In a shock announcement to staff on Thursday, first reported by Reuters information company and later disclosed by the corporate, Zhang stated the change would allow him “to have better influence on longer-term initiatives”. He’ll transfer to a “key technique” place on the finish of the yr, ByteDance stated.
The 38-year-old might be succeeded by Liang, a long-time colleague and the present head of human assets at ByteDance, one of many world’s largest personal tech firms with an estimated worth of about $300bn in current trades.
The administration shake-up — ByteDance’s largest since its launch in 2012 — comes as Chinese language regulators are rising scrutiny of the nation’s largest expertise corporations.
In April, they handed e-commerce big Alibaba Group Holding Ltd a $2.8bn fantastic for anti-competitive practices, and final yr suspended fintech affiliate Ant Group’s preliminary public providing (IPO).
Antitrust regulators have additionally informed Tencent Holdings Ltd they’re making ready to fantastic the gaming big as a lot as $1.55bn, Reuters information company reported final month.
Zhang, who turned ByteDance right into a social media pressure, stated he was not in actual fact a social individual.
He blamed the day-to-day challenges of a CEO as being a hurdle to analysis and innovation whereas calling Liang “a useful accomplice” with “strengths in administration, organisation, and social engagement”.
“I’m extra fascinated about analysing organisational and market rules, and leveraging these theories to additional cut back administration work, somewhat than truly managing individuals,” Zhang, who will stay in his function as chairman, wrote within the memo.
“Equally, I’m not very social, preferring solitary actions like being on-line, studying, listening to music, and considering what could also be potential.”
In an inside memo seen by Reuters information company, Liang — additionally 38 — stated the brand new function represented a “enormous problem” with “quite a lot of strain”.
Liang, not a family identify in China, roomed with Zhang at Nankai College in Tianjin, China. He additionally labored with him at actual property web site 99fang.com previous to becoming a member of ByteDance.
Liang on his LinkedIn profile stated he’s a ByteDance co-founder.
‘Sensible and essential alternative’
Tech advisor Zhou Zhanggui stated ByteDance confronted slowing development of its core China enterprise and wanted to reinvent itself.
“If these issues can’t be resolved, it’s extremely potential that the corporate will encounter main setbacks sooner or later. I feel Zhang’s alternative is smart and essential, irrespective of whether or not his resolution is made actively or passively,” stated Zhou.
The announcement comes lower than a month after ByteDance’s chief monetary officer, Shouzi Chew, grew to become CEO of flagship short-video app TikTok. That submit got here up for grabs when Kevin Mayer, a former Disney govt, left after three months as TikTok grew to become embroiled in a spat between Washington and Beijing.
Zhang owns 20 % to 30 % of ByteDance and holds over 50 % of voting rights, individuals with information of the matter beforehand have informed Reuters information company. ByteDance didn’t touch upon Zhang’s stake.
The founder stated he started a dialogue with a small group of individuals in March about the opportunity of appointing Liang as his successor and can work with him over the subsequent six months to make sure a easy transition.
“Based mostly on earlier expertise it’s seemingly we may see a slowdown of funding in new companies, whereas they might pay extra consideration to outdated companies as the brand new administration crew wants a while for adjustment,” stated Shawn Yang, managing director of Blue Lotus Capital Advisors.
ByteDance, which employs over 100,000 individuals worldwide, had been making ready for a much-anticipated IPO this yr, however halted the plans in April.
“I feel it’s potential that Zhang is anxious that after the IPO he would see a ballooning of his wealth and get quite a lot of consideration from the media. It’s onerous to be a wealthy individual in China. You don’t get as a lot recognition,” stated Beijing-based expertise analyst Li Chengdong.
US-China tensions
Zhang is the newest in a small group of founders of Chinese language tech corporations to maneuver away from day-to-day administration.
Colin Huang, founding father of e-commerce agency Pinduoduo Inc, stepped down as chief govt in 2020 and as chairman in March. The 41-year-old, who owns about 30 % of Pinduoduo, will even quit his tremendous voting rights.
ByteDance’s earlier massive organisational shake-up occurred final yr when Zhang appointed Zhang Lidong as chairman at ByteDance’s China enterprise, and Kelly Zhang as CEO.
TikTok has sought to distance itself from Beijing after america raised nationwide safety issues over the protection of the private information it handles.
Former US President Donald Trump’s administration sought to pressure ByteDance to divest management of the app. A US plan to promote TikTok’s American operations to a consortium that included Oracle Corp and Walmart Inc languished, nonetheless, after ByteDance launched profitable authorized challenges.