TikTok’s US operations are undergoing a major restructuring as the social platform responds to a slowing economy and depressed digital advertising environment.
The reorganization led to radical changes in the management of the US business, the biggest market for TikTok, which is owned by China-based parent company ByteDance.
The overhaul will see North America general manager Sandy Hawkins — who oversees business operations, sales and marketing in the region — transferred and put 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’ move was announced internally Monday at a meeting led by Blake Chandlee, an Austin, Texas-based executive who oversees global business decisions. Chandlee will fill Hawkins’ role on an interim basis.
“Under [Hawkins’] leadership, the team has become a significant player in the digital advertising space. . . and she has always stood up for her team and clients, which has made us a better business,” Chandley said in a memo to staff Monday.
“She will be a valuable partner. . . like [ecommerce] is becoming a critical part of our customers’ needs, and TikTok builds on many of the native behaviors we already see on the platform.”
Hawkins’ reassignment is part of a broader restructuring over the past four months that has cut fewer than 100 jobs. The layoffs include about 20 senior managers and new leadership has been appointed, three people familiar with the restructuring said. Overall, the number of employees in the US has increased over the past year.
Other senior employees have already confirmed their roles have been cut, including David Ortiz, the former global head of ad business systems, who shared on social media that his role had been “eliminated in a much larger reorganization effort.”
The restructuring suggests fast-growing TikTok is not immune to the digital advertising slowdown that has sent shares of Facebook parent Meta and Snapchat parent Snapchat crashing over the past year.
U.S. advertisers are projected to spend $65.3 billion on social media this year, up just 3.6 percent year over year — about 10 times slower than in 2021, according to eMarketer estimates.
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 ByteDance could pose a security risk. The deal will allow it to continue operating, but will place restrictions on how US user data is stored.
TikTok claims access to data for employees worldwide, 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, head of TikTok’s Asia Pacific operations, starting in July 2021. Singh originally joined ByteDance in August 2019.
Singh’s appointment could become official as early as this month, but he is currently in India and needs a work visa that could take until January, these people said.
TikTok told the Financial Times it was currently considering a number of candidates, including Singh.
Hawkins, who could not immediately be reached for comment, is a former Adobe executive and has worked at TikTok since June 2020.
Previously, TikTok replaced senior American executives with talent from abroad. For example, in July it moved Fahad Osman from Dubai to New York, promoting him to head of global marketing operations and intelligence from leading regional marketing for the Middle East.
Pressure on the digital advertising sector has led social networking companies to diversify revenue streams. Meta, Snapchat and TikTok are experimenting with new formats, including games and live shopping, in an effort to be less dependent on ads.
TikTok Shop is a nascent feature that launched in the UK last year where users can buy products from videos and live streams within the app. The company plans to expand into North America, Spain, Ireland and Brazil in the next few months, according to two people familiar with the operations.
TikTok has confirmed that it is expanding e-commerce to the US and continues to evaluate further international expansion.
The shopping channel is already available in Southeast Asia, where it has seen more success with users, particularly in Indonesia, according to multiple people working on the offering.
E-commerce, in particular, has proved lucrative for ByteDance, with e-commerce sales of its Chinese subsidiary Douyin app more than tripling year-on-year. In China, live shopping sales are expected to reach $423 billion this year, according to consultancy McKinsey.
Additional reporting by Hannah Murphy in San Francisco