Zhang Yiming is stepping down as CEO of TikTok’s parent company ByteDance. The position will be filled by Liang Rupo, the company’s co-founder, Zhang’s college roommate, longtime colleague and current head of human resources.
According to Reuters, Zhang disclosed in an employee memo on Thursday (May 20) that the change will “allow me to have greater influence over long-term plans.”
Zhang will be promoted to a “key strategy” position at the end of this year, Byte Jump said in a statement.
Zhang said in the memo that Liang Rupo is “a valuable partner with management, organizational and social engagement strengths,” but did not mention his role as chairman.
It’s another major management change at ByteDance less than a month after its chief financial officer Zhou Shouzhi became chief executive of the company’s flagship short-video app TikTok.
Meanwhile, Chinese regulators are increasingly scrutinizing the country’s biggest tech companies. In April, e-commerce giant Alibaba Group Holding Ltd. was fined $2.8 billion for anti-competitive behavior. Regulators also suspended the initial public offering of Alibaba’s fintech subsidiary Ant Group last year.
Antitrust regulators also told Tencent Holdings Ltd. that they were preparing to fine the e-gaming giant up to $1.55 billion, according to an April Reuters report.
Reuters reported that Zhang Yiming said in the memo that he had turned Byte Jump into a social media force. Zhang claims to be socially inept and lacks the skills of an ideal manager. He also said the CEO’s day-to-day challenges became an obstacle to developing innovations.
In the memo, Zhang, 38, wrote: “I am more interested in analyzing organizational and market principles and using those theories to further reduce management work than in being a real manager.”
He said, “Similarly, I am not very sociable and prefer to keep to myself, such as surfing the Internet, reading, listening to music and exploring feasibility.”
Zhang Yiming owns between 20 and 30 percent of ByteDance and has more than 50 percent of the voting rights, the Reuters report said, citing people familiar with the matter.
Zhang said in the memo that he would work with Liang over the next six months to ensure a smooth transition. He did not mention whether he would give up his voting rights.
Reuters cited an analysis by Yang Zixiao, a managing director at Blue Lotus Research, who said, “Based on past experience, we may see a slowdown in their investment in new businesses, and they may focus more on old businesses as the new management team needs some time to adjust.”
Liang Rupo is not a household name in China. He and Zhang Yiming were classmates and roommates at Nankai University in Tianjin. He also worked with Zhang Yiming at real estate site 99fang.com before joining ByteDance. According to Liang’s LinkedIn profile, he describes himself as a co-founder of ByteDive.
Liang Rupo said he was looking forward to continuing to work with his colleagues and that the new position represented a “huge challenge” and put him under “a lot of pressure,” according to an internal memo from ByteDance cited by Reuters.
Byte Jump has more than 100,000 employees worldwide. The company has been preparing for a highly anticipated initial public offering (IPO) this year, but that plan was put on hold in April this year.
Beijing-based technology analyst Li Chengdong told Reuters: “I think Zhang might be worried that after the IPO he would see his fortune surge and get a lot of media attention. It’s hard to be a rich person in China. You can’t get a lot of recognition.”
Zhang Yiming is one of the few founders of Chinese technology companies to be freed from day-to-day management roles.
Huang Zheng, the founder of e-commerce company Jindo, stepped down as CEO in 2020 and chairman in March. 41-year-old Huang owns about 30 percent of Jindo. He will also give up his super voting rights.
The nine-year-old ByteDuo underwent a major reorganization last year when Zhang Yiming appointed Zhang Lidong and Zhang Nan as chairman and CEO of Beijing-based ByteDuo, respectively.
ByteTok’s TikTok has tried to distance itself from Beijing after the U.S. raised national security concerns about the security of the personal data it handles.
The administration of former U.S. President Donald Trump tried to force ByteTok to relinquish control of TikTok. U.S. plans to sell TikTok’s U.S. operations to a consortium that includes Oracle and Walmart are in trouble.
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