Alibaba, one of the leading tech giants in China, recently shook the Chinese tech landscape with some unexpected news. Daniel Zhang, the former CEO of Alibaba, announced his resignation as the head of the company’s cloud computing division. This decision had an immediate impact on the market, with Alibaba’s stocks dropping by 3.5% on Monday.
The news came as a surprise to many. As Zhang, who had led Alibaba as CEO for eight years, was expected to continue leading the company’s important cloud division in anticipation of an upcoming spin-off. However, in an unexpected turn of events, Eddie Yongming Wu will be taking his place. As the head of the cloud division, which is one of the largest in China in terms of market share.
This leadership change is part of a broader transition in Alibaba’s management.
In March, Alibaba had declared its plans to divide its vast business empire, which spans sectors ranging from e-commerce to entertainment and has a market capitalization of $230 billion.
Many within the company expressed surprise at the timing of the announcement, as it coincided with the scheduled leadership transition.
Zhang’s eesignation and Alibaba: what lies ahead
Zhang took over as CEO of Alibaba in 2015, succeeding the charismatic co-founder, Jack Ma, and became chairman in 2019.
Rivals such as ByteDance and Pinduoduo are also challenging Alibaba in its core domestic e-commerce business.
Despite the challenges, Zhang has received praise for his leadership. Joseph Tsai, in a letter to employees, highlighted how Alibaba, under Zhang’s guidance, has gracefully and determinedly navigated and overcome difficulties.
With the hope of restoring shareholder confidence after a 70% drop in stock prices from its peak three years ago, Alibaba’s leadership is optimistic that the group’s restructuring can unlock value for shareholders.