TikTok transforms US business after advertising decline

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

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

reorganization has resulted in sweeping leadership changes to the US business, the largest market for ticktockowned by China-based parent company ByteDance.

The overhaul will see North America general manager Sandie Hawkins – who oversees business operations, sales and marketing across the region – transferred and put in charge of TikTok Shop in the US, its e-commerce channel, according to five people with knowledge of the change. This follows restructuring in Europe earlier this year.

Hawkins’ move was announced internally on Monday at a meeting chaired by Blake Chandlee, an Austin, Texas-based executive who oversees global business solutions. Chandlee will assume Hawkins’ role on an interim basis.

“Below [Hawkins’] leadership, the team has become a significant player in the digital advertising space. . . and she has always advocated for her team and clients, which has made us a better business,” Chandlee said in a note to staff on Monday.

“He will be a valuable partner. . . as [ecommerce] is a critical part of our client’s needs and TikTok is building a lot of the original behavior we’ve seen on the platform.

Blake Chandlee
Blake Chandlee will assume the role of general manager of North America on an interim basis © Anna Gordon / FT

Hawkins’ reassignment is part of a wider restructuring in the past four months that has seen less than 100 staff made redundant. The cuts include about 20 senior managers and new leadership has been recruited, according to three people familiar with the restructuring. Overall, headcount in the US has increased over the past year.

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

The restructuring shows that the fast-growing TikTok is not immune to it digital advertising slowdown which has caused the usual Facebook mother Meta and Snapchat mother Snap collapsed in the past year.

US advertisers are predicted to spend $65.3bn on social media this year, a year-on-year increase of just 3.6 per cent – ​​about 10 times slower than in 2021, according to estimates from eMarketer.

The reorganization of TikTok’s US operations comes as the company is finalizing a deal with the White House, which has raised concerns that the app is linked to its Chinese parent. ByteDance can lead to security risks. The deal would allow it to keep operating but put limits on how US user data is stored.

TikTok maintains that access to data for employees globally, including engineers in China, is restricted and strictly controlled.

Two people with knowledge of the move said TikTok plans to replace Hawkins permanently with Sameer Singh, head of TikTok’s Asia-Pacific operations since July 2021. Singh first joined ByteDance in August 2019.

Singh’s appointment could be formalized as soon as this month, but he is based in India and requires a work visa that could last until January, this person 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 been with TikTok since June 2020.

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

Pressure in the digital advertising sector has led social network companies to diversify their revenue streams. Meta, Snapchat and TikTok are experimenting with new formats including games and direct shopping in an effort to not rely on advertising.

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

TikTok 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 proven successful with users, particularly in Indonesia, according to several people working on the offering.

Ecommerce, in particular, has proven lucrative for ByteDance; E-commerce sales on the Chinese sister application Douyin have more than tripled a year. In China, sales from live stream shopping are expected to reach $423bn this year, according to management consultancy McKinsey.

Additional reporting by Hannah Murphy in San Francisco

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