TikTok Is Bleeding U.S. Execs Because China Is Still Calling The Shots, Ex-Employees Say

By Emily Baker-White

Forbes Staff

September 21, 2022

People walk past the headquarters of ByteDance, the parent company of video sharing app TikTok, in Beijing in 2020.

AFP VIA GETTY IMAGES


At least five senior leaders hired to head departments at TikTok in the last two years have left the company after learning that they would not be able to significantly influence decision-making.


Three of those former department heads, speaking with Forbes anonymously for fear of retribution, said that after taking their positions, they learned they would be expected to follow direction from the Beijing office of TikTok’s parent company, ByteDance.


“A lot of our guidance came from HQ, and we weren’t necessarily a part of strategy building,” said one former leader. “I’ve been in this industry for a long time. I don’t want to be told what to do.”


Another former employee, who reported to a strategy team based in Beijing (and was not one of the three team leads), told Forbes that a fourth department head also recently departed the company after a corporate reorganization caused that person to report to ByteDance leadership in Beijing, rather than TikTok leadership. (The former department head declined an interview request.)


This strategy employee said they had noticed a theme among the departures: “Folks are hired in leadership positions in the U.S. and then their scope is reduced in favor of folks in Beijing,” they said.


The most high-profile TikTok departure in recent months has been that of Roland Cloutier, who served as the company’s Global Chief Security Officer until July. Cloutier, who did not respond to an interview request, transitioned out of that role because the company has created a new department to manage U.S. user data, which, in words of TikTok CEO Shou Zi Chew, “changes the scope of the Global Chief Security Officer (CSO) role.”


TikTok declined to comment on the departures.


This volatility in leadership comes at a critical moment for TikTok, which has faced regulatory outcry since a report in June established that employees of its parent company, ByteDance, were accessing sensitive U.S. user data from China into 2022. TikTok has aimed to downplay connections to its Chinese parent, but employees have consistently said that internally, the two often operate as a single entity. (Disclosure: In a previous life, I held policy positions at Facebook and Spotify.)


The leadership departures come during a period of dramatic growth. In July 2020, the company announced that it planned to hire 10,000 new employees in the U.S. According to leaked audio from an October 2021 meeting, the size of the team working on TikTok in the U.S. had more than doubled within 10 months, expanding by more than 3,700 people since the beginning of that year.


Some of these employees have been hired to work on Project Texas, an effort to disentangle TikTok’s U.S. operations from the rest of ByteDance’s China-based systems, to assure lawmakers that ByteDance’s Beijing offices were not meddling in American affairs.


Since 2019, TikTok has assured U.S. regulators that it does not store U.S. user data in China, due to fears that ByteDance could use TikTok to harvest Americans’ personal information or warp domestic discourse at the behest of the Chinese government. But a report from BuzzFeed News showed that as of early 2022, irrespective of where data was physically stored, ByteDance employees in China were regularly accessing U.S. users’ private information. (The company confirmed the reporting in a subsequent letter to U.S. senators.)

In response to the report, 14 U.S. senators wrote to TikTok to inquire about its data privacy practices and an FCC commissioner called on Google and Apple to remove TikTok from their app stores. The Senate Intelligence Committee opened a bipartisan investigation into whether TikTok misled U.S. lawmakers, and President Biden signed an executive order urging the Committee on Foreign Investment in the United States, which is currently negotiating a contract with TikTok, to more closely evaluate cybersecurity risks and the collection of data about U.S. citizens. (President Biden is also reportedly considering signing an executive order that would limit the types of data that Chinese companies can collect about U.S. citizens.)


Moreover, five Republican members of Congress recently introduced a bill that would make it illegal for TikTok employees in China to access U.S. users’ data, ban downloads of TikTok on government-issued devices and direct the Federal Trade Commission to investigate whether TikTok has engaged in unfair or deceptive business practices.


Representative Dusty Johnson of South Dakota, who first introduced the bill, told Forbes that the Chinese government is using Americans’ TikTok data for “nefarious purposes.” He hopes that by banning TikTok from government devices, “we can get other Americans to make a smart decision.”


Faced with regulatory scrutiny, TikTok has explicitly tried to “downplay the parent company ByteDance” and “downplay the China connection,” according to a recent TikTok communications playbook obtained by Gizmodo. But interviews with 12 former employees who worked for TikTok and ByteDance since 2020 suggest that internally, ByteDance still exerts significant control over TikTok today — so much so that it has caused senior executives to depart.


"They wanted a pawn or a yes-man ... They wanted a paper-pusher or a cog in the wheel, and that's just not me."

— a former ByteDance leader



One former TikTok employee showed Forbes a paycheck that they received that listed ByteDance, rather than TikTok, as the check’s drawer. Another told Forbes that their contract listed TikTok as their employer, but their tax returns listed ByteDance.


Employees who worked on product, engineering and strategy at TikTok into 2022 — including those on teams handling sensitive U.S. user data — also told Forbes that they reported directly into ByteDance leadership in China, bypassing TikTok’s executive suite. In addition, former employees told the New York Times that key product decisions about TikTok have been made by ByteDance, rather than TikTok, leadership.


In response to a request for comment, TikTok spokesperson Maureen Shanahan said: “TikTok CEO Shou Chew is responsible for TikTok's product and major strategy decisions…As they would in any other company, TikTok's product, growth and strategy teams report in to Shou.” Shanahan did not answer a follow-up question about whether engineering teams report to Chew.



Despite the company’s communications strategy to “downplay” TikTok’s connections to ByteDance and its China HQ, employees internally have been advised to further strengthen those ties. In a recorded call from September 2021, TikTok’s internal auditor — who is also ByteDance’s internal auditor — advised a member of the U.S. Trust & Safety team to forge closer relationships with the company’s China HQ.


The auditor told his colleague that working with Beijing would be necessary, even for changes that would be “specific to the U.S.,” because the Beijing office controlled access to TikTok’s internal tools. He thus urged his colleague to build “the bridge between the two teams,” adding that “without that bridge, it’s gonna — there could be some kind of constraints. It’s just more difficult to get things done.”


Even executives at ByteDance, though, have struggled to influence the company’s decision making. One former leader who left the company because they felt they could not influence strategy characterized this bridge-building as difficult. "My leadership in Beijing was very mistrusting of me, because fundamentally, the way I do business and the way they wanted me to do business was very different," they said.


"They wanted a pawn or a yes-man,” the person said. “They wanted a paper-pusher or a cog in the wheel, and that's just not me."


The executive exodus has left some former employees feeling skeptical about TikTok’s direction. “If they don’t get their leadership and culture in place, they’re going to have a significant amount of challenges moving forward,” one former employee told Forbes. “No company can sustain the amount of attrition that they’ve seen with the lacking leadership and challenging culture.”



Source: forbes.com