Chinese businessman Zhang Yiming, co-founder and CEO of ByteDance (owner of TikTok), announced yesterday that at the end of the year he will leave the company’s management, to take up a new position in the company focused on long-term strategy, culture corporate and social responsibility. Another co-founder, Liang Rubo, the company’s current human resources director, will take over. The decision marks the Chinese tech giant’s biggest shakeup since its launch a decade ago.
“When companies mature and expand, many fall into the trap of the CEO becoming too central. This leads to over-reliance on existing ideas and slows down knowledge structures. To avoid this trap, I have made the decision to take on a new role at ByteDance, ”Yiming said in a letter to employees, noting that he lacks the skills that an ideal boss would have.
The manager, a 38-year-old software engineer and reserved character, has built a fortune of 44,500 million dollars (36,500 million euros), according to Bloomberg, which records an increase in his assets in the last year of 78%, almost 20,000 million dollars in 2020. It is one of the largest fortunes in China.
The businessman added in his letter that “it is time to think about how one can, not only scale, but make innovative, significant and long-term progress” of the company, recalling the research processes for years that firms such as Tesla or Apple undertook before its current success.
The change comes after the company reaped enormous success (TikTok alone has 700 million monthly active users) and being scrutinized by governments around the world, including the US and China. The first accused TikTok of being a threat to national security during the presidency of Donald Trump. And, last month, ByteDance was one of 13 digital platforms that Chinese regulators asked to adhere to stricter regulations in their financial divisions. Beijing has stepped up scrutiny on its tech giants to curb their power.
ByteDance’s co-founder is the latest Chinese manager to step down to get out of the limelight as geopolitics and increased regulation put pressure on Chinese tech giants, according to the Financial Times, recalling how last August, the Former Disney executive Kevin Mayer resigned as CEO of TIkToK within months of taking office, alluding to changes in the political environment. At that time, the Donald Trump Administration was trying to ban the social network in the US and pressured ByteDande to segregate TikTok International and have it bought by one or more US companies.
The aforementioned newspaper points to other recent cases such as Colin Huang, founder of Pinduoduo, who left the Chinese e-commerce group in March, while the Meituan delivery company faces an antitrust investigation. Also Simon Hu, the CEO of Ant, Alibaba’s financial subsidiary, resigned in March as the fintech prepared to undertake a restructuring ordered by Chinese regulators. Chinese regulators abruptly suspended Ant Group’s initial public offering in November 2020, which was to be the largest IPO in history to date, just two days before its shares began trading in Shanghai and Hong Kong.
The best known case is that of Jack Ma, the founder of Alibaba and Ant, who for many months is hardly seen in public after he criticized the Chinese financial system at the end of last year. In April 2021, China imposed a record fine in China of $ 2.8 billion on Alibaba for abusing its position of dominance.