Alibaba, the Chinese tech giant, announced on Tuesday a surprising change in leadership as it aims to recover from a period of sluggish growth attributed to weak consumer spending and government restrictions. The company is also preparing for a comprehensive reorganization of its business operations, which encompass cloud computing, e-commerce, logistics, media and entertainment, and artificial intelligence.
The upcoming restructuring will see Joseph Tsai replace Daniel Zhang as chairman and Eddie Wu take over as CEO, effective from September 10. Zhang stated that it is the appropriate time for him to step down in order for the company to pursue a full spin-off of its advanced cloud computing division. However, he will continue to serve as chairman and CEO of Alibaba Cloud Intelligence Group.
In his statement, incoming chairman Tsai praised Zhang’s exceptional leadership during a challenging period for the business. Alibaba has faced headwinds due to tighter regulations imposed by Beijing on the domestic tech sector, as well as a decline in consumer spending, resulting in three consecutive quarters of single-digit revenue growth this year.
In a surprising move, Alibaba announced in late March that it would undergo a major restructuring, dividing the company into six business groups. This overhaul aims to provide more independence to individual business units by allowing them to pursue their own financing and public listing plans. Each unit will be managed by its own CEO and board of directors.
The purpose of this new structure is to enhance agility and competitiveness in the face of evolving regulatory challenges and global economic pressures. Alibaba, founded by Jack Ma in 1999, has experienced setbacks following Ma’s criticism of Chinese regulators last year, which ultimately led to Beijing halting the planned IPO of Alibaba affiliate Ant Group. The company was also fined a record amount for alleged unfair business practices. However, in January, it was announced that Ma no longer held controlling rights in Ant Group, potentially contributing to both Ant and Alibaba navigating regulatory difficulties.
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Deepak Sen is a tech enthusiast who covers the latest technological innovations, from AI to consumer gadgets. His articles provide readers with a glimpse into the ever-evolving world of technology.
