TikTok’s US operations are undergoing a major overhaul as the social platform responds to a slowing economy and a poor digital advertising environment.
The reorganization has led to sweeping leadership changes in the U.S. business, the largest market for TikTok, which is owned by China-based parent company ByteDance.
As part of the makeover, Sandie Hawkins, general manager for North America, who oversees operations, sales and marketing across the region, will be transferred and put in charge of the TikTok Shop in the US, its e-commerce channel, according to Five People who are aware of the changes. It will be followed by a reorganization in Europe earlier this year.
Hawkins’ move was announced internally Monday at a meeting chaired by Blake Chandlee, an Austin, Texas-based executive responsible for global business solutions. Chandlee will take over the role of Hawkins on a temporary basis.
“Under [Hawkins’] Under his leadership, the team has grown into a major player in the digital advertising space. . . and she has always championed her team and clients, which has made us a better business,” Chandlee said in a note to employees Monday.
“She will be a valuable partner. . . how [ecommerce] is becoming 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 seen fewer than 100 employees laid off. The cuts include about 20 senior managers and new executives have been hired, according to three people familiar with the restructuring. Overall, the number of employees in the USA has increased over the past year.
Other senior employees have already confirmed their roles have been axed, including David Ortiz, former global head of Ads Business Systems, who took to social media to say his role was “eliminated as part of a much larger restructuring.”
The restructuring suggests that fast-growing TikTok isn’t immune to the digital advertising slowdown that has caused shares in Facebook parent Meta and Snapchat parent Snap to plummet over the past year.
eMarketer estimates that U.S. advertisers are expected to spend $65.3 billion on social media this year, up just 3.6 percent year-on-year — about 10 times slower than 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 links to its Chinese parent company ByteDance could pose a security risk. The deal would allow it to continue operations but place limits on storing US user data.
TikTok claims that access to data for employees worldwide, including engineers in China, is limited and tightly controlled.
Two people with knowledge of the move said TikTok plans to permanently replace Hawkins with Sameer Singh, who has led TikTok’s Asia Pacific operations since July 2021. Singh originally joined ByteDance in August 2019.
Singh’s appointment could be official later this month, but he lives in India and needs a work visa that could last until January, these people said.
TikTok told the Financial Times that it is considering several candidates, including Singh.
Hawkins, who could not be immediately reached for comment, is a former Adobe executive and has been with TikTok since June 2020.
TikTok has previously replaced senior US executives with talent from abroad. For example, Fahad Osman was transferred from Dubai to New York in July and was promoted from regional marketing manager for the Middle East to head of global marketing operations and intelligence.
The pressure on the digital advertising sector has prompted social networking companies to diversify their revenue streams. Meta, Snapchat and TikTok are experimenting with new formats like gaming and live shopping to reduce their reliance on advertising.
TikTok Shop is a nascent feature that launched in the UK last year, allowing users to buy products from videos and live broadcasts within the app. The company plans to expand into North America, Spain, Ireland and Brazil over the next few months, according to two people familiar with the business.
TikTok confirmed it is expanding e-commerce to the US and continues to explore further international expansion.
The shopping channel is already available across Southeast Asia, where it has proven to be successful with users, particularly in Indonesia, according to several people working on the offering.
E-commerce in particular has proven lucrative for ByteDance; Its Chinese sister app Douyin’s e-commerce sales have more than tripled year over year. According to management consultancy McKinsey, sales from live stream shopping in China are expected to reach 423 billion US dollars this year.
Additional reporting by Hannah Murphy in San Francisco