ByteDance tells TikTok to draw up US shutdown contingencies as Donald Trump’s ban on Chinese app looms
- Engineers of popular video-sharing app asked to prepare to cease US operations if deal cannot be reached by November deadline
- TikTok has implemented hiring freeze in US for most open positions, bringing in only 5 per cent of staff it had planned to recruit
China’s ByteDance told engineers of its popular short-video app TikTok this week to make contingencies should it need to shut down its US operations, even as it works toward divesting them, people familiar with the matter said on Thursday.
ByteDance has been ordered by President Donald Trump to divest TikTok in the United States, amid security concerns over the personal data it handles.
Microsoft and Oracle are among US companies vying to acquire the assets of TikTok, which claims about 100 million monthly active users in the US. ByteDance is expected to pick a bidder to enter into exclusive talks as early as Friday, according to the sources.
Trump issued an executive order on August 6 that would ban transactions with TikTok and its Chinese parent in 45 days. He issued a separate executive order on August 14 giving ByteDance 90 days, or until November 12, to divest TikTok’s US operations to an American owner.
06:35
US demands for TikTok may escalate decoupling and hurt businesses, says China expert
While TikTok has filed a lawsuit challenging the order, it is preparing for the possibility that it will have to shut down if it has not reached a deal with an acquirer by mid-September, the sources said. It hopes that any shutdown would be temporary, the sources added.