ByteDance's founder and chief executive, Yiming Zhang, is the latest to step down in a slew of top management resignations at Chinese tech giants amid a government crackdown.
Zhang is resigning to "better drive real long-term breakthroughs," he said in an open letter to employees published by the company and mentioned objectives in the areas "of new strategic opportunities, organizational management, and social responsibility." He shared his worries that he has lost track of the developments in technologies and has struggled to keep up.
The co-founder of ByteDance, Rubo Liang, succeeds Zhang as CEO. In the letter, Zhang called Rubo an "invaluable partner" and leader of the company "on numerous critical roles." He added that over the next six months, the two will work side-by-side to ensure a smooth transition.
The news comes after a bitter half-year for Chinese techs. Beijing has led an antitrust campaign on its nation's biggest independent conglomerates including Alibaba Group (NYSE: BABA; HKEX: 9988) and Tencent Holdings (OTC: TCEHY; HKEX: 0700), imposing fines for unfair competition, failure to disclose acquisitions, copyright infringement, and other violations.
In March, the financial arm of Alibaba, Ant Group, announced the resignation of its CEO, Simon Hu, for the pursuit of "philanthropic work." Ant Group has been at the center of the crackdown, with its expected record-breaking IPO postponed in November 2020 and the forced restructuring that heavily weighed on its valuation.
That same month, the founder and chairman of Pinduoduo (Nasdaq: PDD), Colin Huang, stepped down from his role "to pursue research in the food and life sciences." Huang, an ex-Google and Microsoft engineer and serial entrepreneur, established Pinduoduo in 2015 and saw it to become one of China's leading e-commerce platforms rivaling Alibaba and JD.com (Nasdaq: JD; HKEX: 9618). In July 2020, he stepped down as CEO and more recently left his position of chairman.
In April, ByteDance's apps came under scrutiny by the copyright protection watchdog, with short video platforms including Alibaba's Youku, Tencent Video, and iQiyi (Nasdaq: IQ) threatened by legal action.
ByteDance is the operator of the world's No. 1 video-sharing app TikTok and its Chinese version Douyin. Recently, news surfaced that the company has chosen the Stock Exchange of Hong Kong for its much-anticipated initial public offering.
In the United States, TikTok came close to being banned by the Trump administration last year. However, the ban, and its partial sale to U.S. companies, were put under review by Joe Biden. Meanwhile, Chinese apps banned in the U.S. under Trump on the grounds of national security have repeatedly won in court against the Department of Defense and had the bans lifted.