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TikTok owner ByteDance reshuffles major businesses into six sections

Written by Jiaxing Li Published on     2 mins read

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China’s changing regulatory and business environment pose great challenges to ByteDance’s future.

ByteDance will restructure its business and set up six units, CEO Liang Rubo said in a memo circulated within the company on Tuesday. The organizational adjustment comes at a time when the app factory, as ByteDance is known as, faces mounting business development pressure and a changing regulatory environment without a clear roadmap.

News aggregator Toutiao, Xigua Video, and search engine Baike will be merged with its hugely popular TikTok sibling Douyin. The employee development department will be transformed into a vocational education business and join its edtech arm Dali Education, which laid off most of its staff when officials cracked down on the edtech sector this year.

Enterprise collaboration platform Lark and infrastructure-as-a-service provider Volcano Engine will be the core of two separate units that offer virtual workspace and recommendation algorithms to corporate clients. Nuverse will be responsible for the research and development of new games.

Global sensation TikTok will be a separate unit and support cross-border e-commerce. Its CEO Shouzi Chew will step down as ByteDance’s CFO and focus on his duties at TikTok, according to Liang’s memo.

This is the most significant restructuring for ByteDance since Zhang Yiming stepped down as the company’s CEO and passed the baton to Liang. All six business units will directly report to Zhang’s low-key successor.

The organizational changes ensure that “closely related business and teams are combined into BUs [business units]” while ByteDance encounters new opportunities and overcomes challenges, Liang said in the memo.

As Chinese regulators and other officials continue to implement changes for companies that operate internet platforms, ByteDance has already made some adjustments this year to comply with new regulations. The internet conglomerate has shrunk its business operation in the fintech, edtech, and online video game sector, and allowed a state-backed fund to acquire a stake in the privately owned ByteDance.

Slackening growth is also mounting pressure on the ever-expanding ByteDance. Just a day before Liang released his memo, 36Kr reported that Douyin’s product operation, livestreaming, and domestic e-commerce departments were assigned to different directors as their business hit a bottleneck.

Douyin had 640 million daily active users in September, representing a minor uptick from last year’s mark, according to 36Kr. A research report from Guosheng Securities shows that the two giants in China’s short video industry, Douyin and Kuaishou, had a 60% overlap in their user bases in March 2021. Competition in the sector is expected to become fiercer as Kuaishou has also reorganized its business units to streamline its development.

Although the company now faces many changes, ByteDance is ditching the workaholic ethos and 996 work schedule that has come to define the professional (and personal) lives of many tech company employees. ByteDance is mandating that staff can only work in its offices from 10:00 a.m. to 7:00 p.m., five days a week, and special permissions are needed if they want to commit to overtime.

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