Alibaba CEO Steps Down to Focus on Cloud Unit
Alibaba Group on Tuesday announced chairman and CEO Daniel Zhang would resign from his roles, instead turning his attention to his position as the chairman and CEO of the company’s cloud division, which he has simultaneously run since December.
Facts
- Alibaba Group on Tuesday announced chairman and CEO Daniel Zhang would resign from his roles, instead turning his attention to his position as the chairman and CEO of the company’s cloud division, which he has simultaneously run since December.1
- Effective September, executive vice chairman and co-founder Joseph Tsai will take over as chairman, while Eddie Wu, chairman of its e-commerce unit Taobao and Tmall Group, will become Alibaba’s next CEO.2
- The Chinese e-commerce giant previously announced a massive restructuring in March, turning the company into six business units. Last month, Alibaba announced its cloud computing unit would be an independently listed public company within the next 12 months.3
- Tsai co-founded Alibaba in 1999 and served as its CFO until 2013 before transitioning to his role as executive vice chairman. Wu is a fellow co-founder, and Zhang joined the company in 2007 and became chairman and CEO in 2019 after developing Alibaba’s annual “Singles Day” shopping festival.4
- One of China’s largest businesses, Alibaba has faced harsh regulatory scrutiny. It was fined $2.8B for antitrust violations after co-founder Jack Ma delivered a speech critical of China's regulators and financial system in 2020.5
- Alibaba shares fell 2.4% during premarket trading Tuesday.6
Sources: 1Reuters, 2CNN, 3CNBC, 4New York Post, 5Associated Press, and 6Yahoo Finance.
Narratives
- Narrative A, as provided by CNA. Alibaba’s executive reshuffling is a show of confidence in Daniel Zhang’s ability to turn around the company’s cloud unit that also recognizes the near-impossibility of one man serving three high-demanding roles. Joseph Tsai and Eddie Wu have been with Alibaba since the beginning and are more than qualified to assume their new positions.
- Narrative B, as provided by Washington Post. This shakeup is indicative of underlying problems facing Alibaba, and time is short for the group to show it's a dominant force across multiple industries. It’s easy to see Zhang was demoted and is on the hot seat with the cloud unit, just as it’s easy to understand how China’s COVID policies took a toll on business — it’s time for results across all six parts of Alibaba.
.jpg){kind=link}