“Since the beginning of this year, I’ve spent a lot of time thinking about how to better drive real long-term breakthroughs,” Zhang wrote in a letter to employees that the company posted publicly. He added that he made the decision after several months of thinking, and decided that leaving the “day-to-day responsibilities” behind would allow him to have “greater impact on longer term initiatives.”
“The truth is, I lack some of the skills that make an ideal manager,” he said. “I’m not very social, preferring solitary activities like being online, reading, listening to music, and daydreaming about what may be possible.”
Liang Rubo, ByteDance co-founder and head of human resources, will succeed Zhang as CEO.
Zhang’s decision to depart may seem odd, particularly when compared to the paths followed by his counterparts at Western tech firms. ByteDance has experienced a meteoric rise over the last couple of years.
“Zhang was a young software engineer without significant business experience when he suddenly found himself running a massive company in rapidly shifting markets while operating in an extremely complex regulatory and political environment,” said Brock Silvers, chief investment offer at Hong Kong-based Kaiyuan Capital.
While Liang’s appointment as CEO indicates the company isn’t changing strategy, it’s unwelcome news ahead of a possible IPO. “Founders suddenly abandoning their celestial perches may well signal a significant red flag to public markets,” Silvers added.
These top tech executives have a lot to worry about right now as Beijing works to reign in the sector.
Tech leaders who maintain close ties to their companies risk getting caught up in the crackdown. Alibaba co-founder Jack Ma — who resigned as executive chairman in 2019 — has been subject to intense scrutiny after he criticized financial regulators last fall, and watched as Bejing pulled an IPO for Ant Group at the last minute. Ma, who was famous for being an outspoken celebrity entrepreneur, has since shirked the limelight.
“The environment is now so opaque and difficult that even the iconic master-operator Jack Ma has paid a very dear price for missteps,” Silvers said. “Zhang Yiming and Colin Huang are intensely aware of this example, and their desire to not follow in Ma’s most recent footsteps probably played at least some role in their respective decisions to step down.”
While “this may be beneficial or necessary from Beijing’s standpoint,” he added, “over the longer term it cannot bode well for China’s tech ecosystem.”