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Exclusive | TikTok owner ByteDance dissolves strategic investment unit amid Beijing’s Big Tech scrutiny

  • The Beijing-based unicorn is disbanding an internal unit in charge of external deals
  • ByteDance says employees from the unit will be reassigned to other departments after a business review

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TikTok owner ByteDance is said to be dissolving its strategic investment unit. Photo: dpa

ByteDance, owner of popular short video app TikTok and its Chinese sibling Douyin, is dissolving its strategic investment unit and reassigning about a hundred employees, partly in response to Beijing’s increased scrutiny of the “irrational expansion of capital”, according to three people with knowledge of the matter.

The strategic investment unit, which handles ByteDance’s major business deals such as mergers and acquisitions, has been a core part of the world’s largest unicorn, which is privately valued at about US$350 billion.

Unit head Zhao Pengyuan has moved to the chief executive’s office to oversee strategic planning, according to a source who declined to be named because they are not authorised to speak to the media.

Two other sources said that some employees would be laid off, although it remains unknown how many would have to leave.

The closure of the strategic investment unit stemmed from its failure to invest in digital marketing service provider GrowingIO, according to Chinese media outlet Caixin, citing unnamed sources close to ByteDance.

In a statement, ByteDance said it has decided to “distribute employees from the strategic investment unit to various business lines” after a review and analysis of the company’s business earlier this year. Relevant planning and discussions are still under way, the company said.

The unit’s disbandment comes as the Chinese government continues efforts to limit the reach of Big Tech companies in the country. China’s top leadership concluded at a core economic planning meeting at the end of last year that the country would set up “traffic lights” to control the flow of capital and tame “barbaric growth”.

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