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Saturday, November 26, 2022
HomeEconomyTikTok restructures in the US after falling advertising

TikTok restructures in the US after falling advertising

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TikTok is undergoing a major restructuring in the United States to try to circumvent the country’s slowing economy and falling digital advertising revenue.

The reorganization resulted in changes to the company’s leadership in the US, the biggest market for TikTok, which is owned by China-based ByteDance.

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The review will see General Manager North America Sandie Hawkins – who oversees business operations, sales and marketing across the region – move to lead TikTok Shop, the app’s e-commerce channel in the US, according to five people with knowledge of the changes. They follow a restructuring carried out in Europe earlier this year.

Hawkins’ move was announced internally Monday at a meeting led by Blake Chandlee, an executive in Austin, Texas, who oversees global business solutions. Chandlee will take on the role of Hawkins on an interim basis.

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“Under the leadership [de Hawkins]the team has become a significant player in the digital ad space, and she has always stood up for her team and her clients, which has made us a better company,” Chandlee said in a note to the team on Monday.

“She will be a valued partner as [o comércio eletrônico] becomes a critical part of our customers’ needs and TikTok builds on many of the native behaviors we already see on the platform.”

Hawkins’ transfer is part of a broader restructuring over the past four months that has included the firing of about 20 senior managers and the formation of new leadership, according to three people familiar with the restructuring. In general, the number of employees in the US has increased in the past year.

Other senior officials have already confirmed that their positions have been cut, including David Ortiz, the former global head of ad business systems, who shared on social media that his role has been “eliminated in a much larger reorganization effort.”

The restructuring suggests that the fast-growing TikTok is not immune to the slowdown in digital advertising that caused shares in Facebook parent Meta and Snap, which owns Snapchat, to collapse last year.

According to eMarketer’s projections, US advertisers are expected to spend $65.3 billion on social media this year, an annual increase of just 3.6%, ten times slower than in 2021.

The reorganization of TikTok’s US operations comes as the company finalizes a deal with the White House, which has raised concerns that the app’s ties to its Chinese parent company ByteDance could pose a security risk. The deal would allow it to continue operating, but would place limits on how US user data is stored.

TikTok claims that access to data for employees around the world, including engineers in China, is limited and strictly controlled.

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

Singh’s appointment could be made official later this month, but he lives in India and needs a work visa that could take until January to be issued, these people said.

TikTok told the Financial Times that it is considering several candidates, including Singh.

Hawkins, who could not immediately be reached for comment, is a former Adobe executive and has been on TikTok since June 2020.

TikTok has already replaced senior executives in the US with talent from abroad. In July, he transferred Fahad Osman from Dubai to New York, promoting him from regional marketing leader for the Middle East to head of global marketing intelligence and operations.

Pressure on the digital advertising industry has led social media companies to seek diversification of 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.

The TikTok Shop is a new feature launched in the UK last year where users can buy products from videos and live streams in the app. The company plans to expand into North America, Spain, Ireland and Brazil in the coming months, according to two people familiar with the operations.

TikTok has confirmed that it is expanding e-commerce to the US and continues to assess international expansion.

The shopping channel is already available in Southeast Asia, where it has had success with users, especially in Indonesia, according to several people working on the offering.

E-commerce, in particular, has proven profitable for ByteDance; e-commerce sales on its Chinese sister app Douyin more than tripled year on year. In China, live shopping sales are expected to reach $423 billion this year, according to management consultancy McKinsey.

(Collaborated with Hannah Murphy)

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