ByteDance CEO steps down and chooses college roommate as his successor Business and Economic News

Zhang Yiming announced that he would step down as the CEO of TikTok owner ByteDance, saying that he lacks the social skills to become an ideal manager, and appointed his university roommate Liang Lubo as his successor to cope with the rising wave of big technology regulations.

In a surprise announcement by Zhang to employees on Thursday, it was first reported by Reuters and later disclosed by the company. Zhang said that this change will allow him to “have a greater impact on long-term plans.” ByteDance said he will be promoted to a “key strategy” position at the end of this year.

Liang Qichao, 38, will take over. He is a long-term colleague and currently the head of human resources at ByteDance. ByteDance is one of the world’s largest private technology companies, with an estimated recent transaction volume of approximately US$300 billion.

At the time of the largest management change since ByteDance was launched in 2012, Chinese regulators are increasingly scrutinizing the country’s largest technology company.

In April of this year, they fined e-commerce giant Alibaba Group Holding Ltd (Alibaba Group Holding Ltd) a $2.8 billion anti-competitive practices and suspended the initial public offering of fintech subsidiary Ant Group last year. (IPO).

Reuters reported last month that antitrust regulators also told Tencent Holdings Co., Ltd. they were preparing to impose a fine of up to $1.55 billion on the gaming giant.

Zhang, who turned ByteDance into a social media force, said that he is not actually a social person.

He attributed the CEO’s daily challenges to research and innovation, and at the same time called Liang Qichao a “valuable partner” with “management, organization and social participation strength.”

“I am more interested in analyzing organizational and market principles, and using these theories to further reduce management work, rather than truly managing personnel,” Zhang, who will continue to serve as chairman, wrote in the memo.

“Similarly, I am not very social, and like solo activities, such as surfing the Internet, reading, listening to music and thinking about what might happen.”

In an internal memo from Reuters, Liang Liang, 38, said that the new position represents “great challenges” and “great pressure.”

Liang is not a household name in China, and lives with Zhang from Nankai University in Tianjin, China. Before joining ByteDance, he also worked with the real estate website 99fang.com.

Liang said on his LinkedIn profile that he is the co-founder of ByteDance.

“A wise and necessary choice”

Technical consultant Zhou Zhanggui said that ByteDance is facing the slowdown of its core business in China and needs to reshape itself.

“If these problems cannot be resolved, then the company is likely to encounter major setbacks in the future. I think that whether his decision is made actively or passively, Zhang’s choice is wise and necessary.”

Before the announcement, Shouzi Chew, CFO of ByteDance, became the CEO of TikTok, the flagship short video app. When TikTok was embroiled in a quarrel between Washington and Beijing, and three months later, when former Disney executive Kevin Mayer left, the position attracted attention.

After the United States raised national security concerns about the safety of the personal data it processes, TikTok tried to distance itself from Beijing [File: Dado Ruvic/Reuters]

People familiar with the matter have previously told Reuters that Zhang owns 20% to 30% of ByteDance and owns more than 50% of the voting rights. ByteDance did not comment on Zhang’s shares.

The founder said that he started discussing with a small group of people in March about the possibility of appointing Liang Qichao as his successor, and will work with him over the next six months to ensure a smooth transition.

“Based on the new experience, we may see a slowdown in investment in new businesses, and since the new management team will take some time to adjust, they may pay more attention to the old business,” Shawn Yang, managing director of Blue Lotus Capital Advisors Say. .

ByteDance has more than 100,000 employees worldwide and has been preparing for this year’s highly anticipated IPO, but terminated the plan in April.

“I think Zhang may be worried that after the IPO, he will see his wealth surge and attract widespread media attention. It is difficult to become a rich person in China. You won’t get that much recognition,” Li Chengdong, a technical analyst based in Beijing, said.

U.S.-China tensions

Zhang is the newest among the founders of a handful of Chinese technology companies, who have gotten rid of daily management.

Colin Huang, the founder of the e-commerce company Pinduoduo, resigned as CEO in 2020 and resigned as chairman in March. The 41-year-old who owns about 30% of Pinduoduo will also give up his super voting rights.

The previous large-scale organizational reorganization of ByteDance occurred last year, when Zhang appointed Zhang Lidong as the chairman of ByteDance’s China business and Kelly Zhang as the chief executive officer.

After the United States raised national security concerns about the security of the personal data it processes, TikTok tried to distance itself from Beijing.

The administration of former US President Donald Trump tried to force ByteDance to give up control of the app. After ByteDance launched a successful legal challenge, the US plan to sell TikTok’s US business to a consortium including Oracle and Wal-Mart failed.