Zhang Yiming, founder of Chinese web giant ByteDance – the firm behind TikTok – will step down as Chairman of the company, according to sources. The news comes the day after the company announced a major structural overhaul and half a year after Zhang announced that he would relinquish the position of CEO.
ByteDance’s co-founder and soon-to-be CEO, Liang Rubo, has taken over as Chairman of the company, Reuters reported. He is part of the company’s five-person board, which includes General Atlantic, Sequoia Capital, Coatue Management and Susquehanna International.
The report did not say why Zhang decided to give up his position as Chairman. It is also unclear whether there will be changes to his majority voting rights.
ByteDance has recently announced several structural changes. An internal memo released on Tuesday said that the company would split into six separate business units, focusing on Chinese media, vocational training, enterprise solutions, work collaboration technology, gaming and overseas markets. ByteDance is currently ranked number one company worldwide on GlobalData’s social media thematic scorecard.
In May, Zhang said that he would step down as CEO by the end of the year to focus on “longer-term initiatives.” Reuters’ report said that this plan remains unchanged.
Zhang’s departure is not the first recent one in China tech news. On Monday, the CEO of ByteDance rival Kuaishou, Su Hua, said that he would step down as CEO, again to focus on long-term strategy development and new initiatives.
Earlier this year, various Chinese ecommerce CEOs also announced that they would step aside. In September, Richard Liu, the founder and CEO of JD.com, said that he would give up his executive position.
Colin Huang, the Chairman and CEO of Pinduoduo went even further, saying that he would give up both positions.
All the departing executives cited the ambition to focus on long-term strategy as the main reason for their departure. However, the ongoing tightening of government control taking place in China likely played a role in their decisions.
Last November, Ant Group, the financial arm of Chinese ecommerce giant Alibaba, saw its initial public offering (IPO) torpedoed by the government at the last minute. Since then, many companies have been hit by Beijing’s tech crackdown.
One notable victim was the outspoken former CEO and Chairman of Alibaba, Jack Ma, who was reprimanded by the government and forced to retreat from the limelight and to give up his position in the company.
“Firstly, Jack Ma needs to protect his life. Secondly, he needs to protect his money. If he can manage both, the rest will depend on political speculation. He must remain on politics’ good side,” US-based economist Li Hengqing told news site Wenxue City.
Given the current hostile climate towards social media and ecommerce companies in China, it is likely that other chief executives are stepping aside before potentially suffering a similar fate.