TikTok revises its activities in the United States after the advertising crisis

TikTok revises its activities in the United States after the advertising crisis

The TikTok logo
TikTok is finalizing a deal with the White House, which has raised concerns that the app’s ties to its Chinese parent company ByteDance could pose a security risk © FT montage/Unsplash

TikTok’s US operations are undergoing a major restructuring as the social platform reacts to a slowing economy and a depressed environment for digital advertising.

The reorganization has brought sweeping changes to the leadership of the US business, TikTok’s biggest marketplace, owned by China-based parent company ByteDance.

The revamp will see North America general manager Sandie Hawkins – who oversees business operations, sales and marketing in the region – transferred and placed in charge of TikTok Shop in the US, its e-commerce channel, according to five people familiar with the changes. It follows a restructuring in Europe earlier this year.

Hawkins’ decision was announced internally Monday in a meeting led by Blake Chandlee, an Austin, Texas-based executive who oversees global business solutions. Chandlee will take on the role of Hawkins on an interim basis.

“Below [Hawkins’] leadership, the team has become an important player in the field of digital advertising. . . and she always stood up for her team and her clients, which made us a better company,” Chandlee said in a memo to staff Monday.

“She will be a valuable partner. . . as [ecommerce] is becoming an essential part of our customers’ needs and TikTok builds on many of the native behaviors we already see on the platform.

Blake Chandlee
Blake Chandlee will assume the role of interim Managing Director of North America © Anna Gordon/FT

Hawkins’ reassignment is part of a larger restructuring over the past four months that has seen fewer than 100 employees made redundant. The cuts include about 20 senior executives and new leaders have been brought in, according to three people familiar with the restructuring. Overall, membership in the United States has increased over the past year.

Other senior executives have already confirmed their roles have been cut, including David Ortiz, former global head of advertising business systems, who shared on social media that his role had been “eliminated in a much larger reorganization effort”. .

The restructuring suggests that fast-growing TikTok isn’t immune to the slowdown in digital advertising that caused shares of Facebook parent Meta and Snapchat parent Snap to crash over the past year. past year.

U.S. advertisers are expected to spend $65.3 billion on social media this year, a year-over-year increase of just 3.6% – about 10 times less than in 2021, according to estimates. eMarketer.

The reorganization of TikTok’s US operations comes as the company finalizes a deal with the White House, which has raised concerns that the app’s ties to its Chinese parent company ByteDance could pose a security risk. The deal would allow it to continue operating, but would impose limits on how US user data is stored.

TikTok maintains that access to data for employees around the world, including engineers in China, is limited and strictly controlled.

Two people familiar with the move said TikTok plans to replace Hawkins permanently with Sameer Singh, who has been in charge of TikTok’s Asia-Pacific operations since July 2021. Singh originally joined ByteDance in August 2019.

Singh’s appointment could be formalized as early as this month, but he is based in India and needs a work visa which could take until January, these people said.

TikTok told the Financial Times it was considering several candidates, including Singh.

Hawkins, who could not immediately be reached for comment, is a former Adobe executive and has worked with TikTok since June 2020.

TikTok has previously replaced senior American executives with foreign talent. For example, in July, he transferred Fahad Osman from Dubai to New York, promoting him from regional marketing manager for the Middle East to head of global marketing operations and intelligence.

Pressure on the digital advertising industry has pushed social media companies to diversify their revenue streams. Meta, Snapchat and TikTok are experimenting with new formats, including games and live shopping, in an effort to reduce their reliance on advertising.

TikTok Shop is a nascent feature that launched in the UK last year, where users can buy products from videos and live streams on the app. The company plans to expand into North America, Spain, Ireland and Brazil over the next few months, according to two people familiar with the operations.

TikTok has confirmed that it is expanding e-commerce in the United States and continues to evaluate its international expansion.

The shopping channel is already available across Southeast Asia, where it has proven itself to users, particularly in Indonesia, according to several people working on the offering.

E-commerce, in particular, has proven lucrative for ByteDance; E-commerce sales on its Chinese sister app Douyin more than tripled year-on-year. In China, direct shopping sales are expected to reach $423 billion this year, according to management consultancy McKinsey.

Additional reporting by Hannah Murphy in San Francisco

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