TikTok overhauls US business following advertising slump – New Zealand Herald


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TikTok, with US headquarters in Culver City near Los Angeles, is overhauling its American business.
By Patrick McGee in San Francisco and Cristina Criddle in London
TikTok’s US operations are undergoing a big restructuring as the social platform responds to a slowing economy and a depressed environment for digital advertising.
The reorganisation has resulted in sweeping leadership changes to the US business, the largest market for TikTok, owned 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 placed in charge of TikTok Shop in the US, its ecommerce channel, according to five people with knowledge of the changes. It follows a restructuring in Europe earlier this year.
Hawkins’ move was announced internally on Monday at a meeting led by Blake Chandlee, an executive based in Austin, Texas, who oversees global business solutions. Chandlee will assume Hawkins’ role on an interim basis.
“Under [Hawkins’] leadership, the team has become a significant player in the digital ads 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.
“She will be a valuable partner…as [ecommerce] becomes a critical part of our client needs and TikTok builds on many of the native behaviours we already see on the platform.”
Hawkins’ reassignment is part of a broader 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, the headcount in the US has increased over the past year.
Other senior employees have already confirmed that their roles have been cut, including David Ortiz, former global head of ads business systems, who shared on social media that his role was “eliminated in a much larger reorganisation effort”.
The restructuring suggests that fast-growing TikTok is not immune to the digital advertising slowdown that has caused shares of Facebook parent Meta and Snapchat parent Snap to collapse 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 — around 10 times slower than in 2021, according to estimates from eMarketer.
The reorganisation of TikTok’s US operations comes as the company is finalising 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.
The deal would allow it to keep operating but place limits on how US user data is stored.
TikTok maintains that access to data for employees globally, including engineers in China, is limited and strictly controlled.
Two people with knowledge of the move said TikTok planned to replace Hawkins on a permanent basis with Sameer Singh, head of TikTok’s Asia-Pacific operations since July 2021. Singh originally joined ByteDance in August 2019.
Singh’s appointment could be made official as soon as this month, but he is based in India and requires a work visa that might take until January, these people said.
TikTok told the Financial Times it was considering several candidates, including Singh.
Hawkins, who could not be immediately 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 abroad. For instance, in July it moved 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.
The pressure on the digital advertising sector has driven social networking companies to diversify revenue streams. Meta, Snapchat and TikTok are experimenting with new formats including gaming and live shopping in an effort to be less reliant on advertising.
TikTok Shop is a nascent feature that launched in the UK last year, where users can buy products from videos and live broadcasts on the app.
The company plans to expand in North America, Spain, Ireland and Brazil over the next few months, according to two people familiar with the operations.
TikTok confirmed it was expanding ecommerce to the US and continuing to evaluate further international expansion.
The shopping channel is already available across southeast Asia, where it has proved successful with users, especially in Indonesia, according to multiple people working on the offering.
Ecommerce, in particular, has proved lucrative for ByteDance; ecommerce sales on its Chinese sister app Douyin have more than tripled year on 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
© Financial Times
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