Hangzhou-based Chinese tech giant Alibaba has made an unexpected announcement regarding the departure of its former CEO, Daniel Zhang. Zhang, who was slated to assume control of a pivotal subsidiary as part of Alibaba’s significant restructuring efforts, has left the company, catching many off guard.
Alibaba stands as one of China’s foremost technology companies, boasting a diverse portfolio encompassing cloud computing, e-commerce, logistics, media, entertainment, and artificial intelligence.
After years of tumultuous developments in the Chinese tech sector, Alibaba unveiled its most extensive restructuring to date in March. The company divided itself into six distinct entities with plans to eventually list them separately on the stock exchange.
Daniel Zhang was scheduled to lead the newly formed cloud computing branch, now an autonomous entity, starting on Monday. However, just two months after this announcement, Alibaba disclosed that Zhang was no longer associated with the company.
In a statement made to the Hong Kong Stock Exchange, where Alibaba is listed, the company expressed its deepest gratitude to Mr. Zhang for his 16 years of contributions to Alibaba Group. No specific reason was provided for his departure.
Alibaba confirmed its commitment to moving forward with its plan to spin off the cloud computing firm under the leadership of a newly appointed management team.
In June, Alibaba had previously announced that Joseph Tsai would succeed Zhang as chairman, with Eddie Wu taking on the role of CEO. Daniel Zhang played a pivotal role in Alibaba’s success over the past decade, notably spearheading the widely popular Singles’ Day shopping festival since its inception in 2009.
The announcement of Zhang’s departure had an immediate impact on Alibaba’s stock, with shares dropping nearly 3.5 percent on the first working day following the company’s restructuring into six distinct branches.
Alibaba’s expansive business operations encompass not only e-commerce and cloud computing but also logistics, media, entertainment, and artificial intelligence. However, the company’s size and influence have drawn the scrutiny of Chinese regulators, particularly as Beijing seeks to tighten oversight of the tech sector.
In 2020, Alibaba became the first tech giant in China to face increased regulatory oversight when authorities halted what would have been one of the most valuable public listings in history for its former subsidiary, Ant Group, valued at $34 billion. Ant Group is the parent company of Alipay, a widely used mobile payment application in China.
Following the suspension of Ant Group’s IPO, Alibaba was subjected to an investigation for alleged anti-competitive practices and received a substantial $2.8 billion fine. In July, Ant Group itself was fined nearly $1 billion for breaching banking regulations by Chinese authorities.