In an unexpected twist, Chinese e-commerce titan Alibaba has announced the departure of its former CEO, Daniel Zhang, just as the company was gearing up for a significant restructuring. Zhang, who was set to lead the firm’s new cloud computing subsidiary as part of the restructuring, has left the company, leaving the tech giant at a crossroads.
Alibaba, headquartered in Hangzhou, boasts a diverse business portfolio, including cloud computing, e-commerce, logistics, media, entertainment, and artificial intelligence.
In March, the company unveiled its most extensive restructuring effort ever, dividing itself into six distinct entities with the intention of separately listing them on the stock exchange.
“The board of our Company expresses its deepest appreciation to Mr. Zhang for his contributions to Alibaba Group over the past 16 years,” the company stated in a late Sunday announcement to the Hong Kong Stock Exchange. However, no explanation was provided for his sudden departure.
Despite Zhang’s exit, Alibaba is moving forward with plans to spin off its cloud computing arm under new leadership. Joseph Tsai has replaced Zhang as chairman, while Eddie Wu has taken over as CEO.
Daniel Zhang has played a pivotal role in Alibaba’s success over the past decade, particularly in spearheading the wildly popular Singles’ Day shopping festival since its inception in 2009.
Nevertheless, the news of his departure had an immediate impact on the company’s stock, with shares plummeting nearly 3.5 percent on the first working day of its reorganization into six distinct branches.
Alibaba’s vast influence extends beyond e-commerce and cloud computing, encompassing logistics, media, entertainment, and artificial intelligence. Yet, its immense size has also made it a target for Chinese regulators as Beijing tightens its grip on the tech sector.
In 2020, Alibaba faced increased oversight when Chinese authorities halted the highly anticipated IPO of its former subsidiary, Ant Group, which was set to be one of the most valuable public listings in history at $34 billion.
Shortly after, Alibaba itself was investigated for alleged anti-competitive practices and slapped with a $2.8 billion fine. In July, Ant Group was fined nearly $1 billion for breaching banking regulations, adding to the challenges facing Alibaba and its subsidiaries in the evolving regulatory landscape.
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