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TikTok owner restructures after tough year

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TikTok owner ByteDance has announced its first restructuring since its founder stepped back in May.

In an internal memo sent to staff on Tuesday, acting chief executive Liang Rubo, who will officially take over from founder Zhang Yiming in December, announced that the internet company would split into six business units, including content creation, education and gaming.

Michael Norris, senior research analyst at Shanghai-based consultancy AgencyChina, said “restructuring has been a major theme for ByteDance amid a tough year for the company”.

Beijing’s crackdowns on online education and gaming mean that the company’s investments in the two fields “could take a longer time to come to fruition”, said Norris.

The requirement for Chinese internet companies to open up their platforms to competitors and allow interoperability between various apps also “raises questions about how successful its ecommerce ambitions will be”, he added.

Chief financial officer Shou Zi Chew, who joined ByteDance in March, will now give up that job and focus solely on overseeing TikTok. Chew, who is based in Singapore, became TikTok’s chief in May and had been splitting time between the two roles.

ByteDance’s sprawling array of products, which includes the workplace messaging app Lark and video-sharing platform Xigua, were scattered across the business, reporting to different senior leaders.

The Financial Times reported in August that ByteDance was seeking to go public in Hong Kong by early next year.

Norris said the reshuffle would make the company’s structure “more intelligible for investors looking at any potential prospectus, making it easier to find cash cows and future growth engines”.

The move to streamline the business comes after ByteDance laid off staff working in the education technology wing of the business following Beijing’s restrictions on the online education sector in July.

Its slimmed-down education offerings focusing on non-teacher-based learning and adult education would be housed in a unit called Dali Education, the memo said.

“The company’s business lines are growing and maturing and need flexibility to address their own unique challenges,” the memo said.

The restructuring comes a day after ByteDance introduced new policies on shorter working hours, in an attempt to improve employee welfare. China-based employees were told that they should only work from 10am to 7pm on weekdays and would need to seek approval to stay in the office beyond those hours.

ByteDance did away with a policy requiring employees to work weekend overtime starting in August.

Tech companies’ gruelling work hours, known as the “996” because employees were expected to be in the office from 9am to 9pm, six days a week, has come under increased scrutiny this year following public outcry over work-related deaths.

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