TikTok owner ByteDance starts to shift operations out of China

TikTok owner ByteDance starts to shift operations out of China

TikTok’s poaching of Disney’s Kevin Mayer to be its CEO was just the most visible part of a broader strategy by its Chinese owner to shift its center of power away from China at a time of rising global tensions, several people familiar with the plans said.

The short video app’s parent company, ByteDance, has quietly made a series of moves in recent months to transfer global decision-making and research capabilities out of its home country, the sources told Reuters.

The strategy is aimed not only at TikTok, which is not available in China, but all of ByteDance’s non-China focused businesses, the sources said. Such businesses also include units in India like social networking app Helo.

ByteDance has expanded TikTok’s engineering and research and development operations in Mountain View, Calif., according to three sources. One of the people said it had hired more than 150 engineers there.

ByteDance has also hired a New York-based investor relations director to stay in touch with major investors including General Atlantic and KKR, relationships that were previously managed through Beijing, according to two sources.

The new hire, Michelle Huang, is a former SoftBank investor who worked on the Japanese firm’s investment in ByteDance. Huang did not immediately respond to an emailed request for comment.

The changes come at a time of heightened tension between the US and China over trade, technology and the COVID-19 pandemic, as well as intense US regulatory scrutiny of TikTok, which has rapidly gained popularity around the globe and counts the US as one of its biggest market.

Formerly Walt Disney streaming chief Mayer, who was dually named ByteDance’s chief operating officer based in Los Angeles, will also be handed leadership for areas such as global corporate development. Many of his responsibilities were previously managed out of Beijing, according to three sources.

More broadly, ByteDance is also recruiting engineers around the world, including in Singapore, Jakarta and Warsaw, online job postings show.

These significant organizational changes are being greeted warily by some ByteDance staff who support the company’s global operations from China, three sources told Reuters. They are concerned they may become less relevant in the next phase of expansion and have started to look for work elsewhere, the sources said.

For TikTok, the rapid expansion of the US engineering team is part of efforts to migrate its technical resources to the West from China, where most of the work on the app has been done up to this point, according to two of the sources familiar with the company’s plans. It is not uncommon for multinational tech companies like Google to have engineers in China.

Although the engineering team on the app have previously reported to managers in China, TikTok is in the process of recruiting a high-level executive to run the engineering department from the US, according to two sources. It has approached a senior Google employee in recent months, one source said.

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