TikTok’s Beijing-based owner has taken an increasing grip on its operations, according to company insiders. There is a growing cultural conflict between its Chinese executives and US employees.
The U.S. government passed a law this week aimed at forcing TikTok to divest from China’s ByteDance or face a nationwide ban. However, acquiring the viral video app from its $268 billion parent company would be a daunting challenge.
More than two dozen current and former employees told the Financial Times that TikTok remained affiliated with ByteDance.
These people added that ByteDance employees, including senior managers, had been transferred to TikTok; U.S.-based workers who spoke Mandarin were preferred because of their ability to coordinate with Chinese colleagues. and restructuring efforts targeted U.S.-based workers who did not meet high performance standards.
“There is such a façade or façade that these two companies are separate,” said Joël Carter, a former U.S. advertising policy executive who left in August 2023. “Actually, they are one and the same.”
The insiders spoke mostly on condition of anonymity for fear of retaliation from the company, which can claw back bonuses and stock awards if employees violate non-disparagement rules, according to documents obtained by the Financial Times.
These claims come after TikTok executives once insisted under oath that it was a “distributed” company with no official global headquarters. The website notes that TikTok’s headquarters are in Los Angeles and Singapore, it has no offices in China and that decisions are not made in Beijing.
In a statement, TikTok said: “Like any global company, we have employees around the world, and employees move throughout their careers to meet business needs. “This is neither a new development nor unique to TikTok.”
It added: “The premise and statements in this story are flawed and based on anonymous sources spreading falsehoods to further a personal agenda.” Any journalist would know that this falls short of journalistic standards of presenting actual facts .”
The company has vowed to fight a legal battle against U.S. lawmakers, while the Chinese government has said it would oppose a sale.
Any divestment will be difficult. Documents from 2023 seen by the FT show that China-based ByteDance employees in teams such as security product operations report directly to US-based executives and some global employees report directly to China-based bosses.
Ten current and former employees said the number of Chinese employees at TikTok has increased over the past two years, with ByteDance moving employees from China to other global offices, including the United States.
This also included high-ranking managers. Last year, ByteDance moved Qing Lan from Douyin, its Chinese version of the short-video app, to head TikTok’s advertising division for small and medium-sized businesses in the U.S., an appointment first reported by The Wall Street Journal.
“They override our local decisions [and] “Downgrade of American leadership,” said a current senior U.S. official.
Several U.S. employees said colleagues who worked in product management and didn’t speak Mandarin were often at a disadvantage because the role required close coordination with engineers in China.
They added that for some roles, such as ad sales, this is not a problem. Two recent insiders said they were told to prioritize hiring Chinese or Mandarin-speaking staff in the United States.
Many U.S. workers complained about long hours and an opaque performance appraisal system in which managers allegedly manipulated employees’ reviews to achieve predetermined goals and facilitate restructuring.
The moves are partly because ByteDance executives believe TikTok is not operating as effectively as its Chinese operations, suggesting that American employees are underperforming than their counterparts in China, according to a senior person familiar with it is familiar with the mindset of leadership.
The push came as ByteDance heads toward a blockbuster initial public offering to impress investors with TikTok’s explosive growth. TikTok generated record US revenue of $16 billion in 2023, the FT reported last month.
But in congressional hearings, TikTok executives faced criticism from U.S. politicians who claimed the Chinese Communist Party could access the data of the app’s 170 million American users to spy on them under national intelligence laws, carry out propaganda or overturn elections disturb.
In January, TikTok boss Shou Zi Chew insisted that US user data had been moved “out of reach” of China to a firewalled cloud structure as part of a $1.5 billion partnership with Oracle , known as “Project Texas.”
However, many current and former TikTok employees point to other instances where the company continues to align itself with ByteDance.
Several people said basic processes such as approving music for promotional purposes or troubleshooting technical glitches required coordination with counterparts in China.
Policy and content moderation decisions have been a flashpoint. TikTok’s trust and safety team previously clashed with employees in China over content that used the popular dance move “twerking,” according to three former employees familiar with the matter.
Chinese leaders have deemed twerking too sexually suggestive and called for it to be banned or made harder to detect, while their US counterparts have repeatedly pushed back against it.
According to TikTok, ByteDance employees in China were not involved in trust and security decisions made outside the US and Ireland.
Internal systems – such as those for communication, collaboration or employee access to employment information – are hosted in China, TikTok insiders said. However, they said the software could also track employees’ locations using their IP addresses and other biometric data.
The company has also received complaints that it is hostile to women and minorities, and has been hit with a number of discrimination-related lawsuits and complaints in recent months.
That includes a statement from Carter, who claims he suffered retaliation from TikTok after he complained about racial discrimination in a filing with the U.S. Equal Employment Opportunity Commission. TikTok has previously said it “takes employee concerns very seriously and [has] There are strict policies in place that prohibit discrimination, harassment and retaliation in the workplace.”
In February, Katie Puris, TikTok’s former U.S. global marketing director, claimed in a lawsuit that she was fired because some of the company’s executives, including ByteDance Chairman Lidong Zhang, believed she lacked “the docility and gentleness that specifically is required of female employees”. TikTok has not commented on the lawsuit.
There were attempts to reduce tensions. A document circulated among some TikTok employees last year suggests that “high power distance” – the acceptance of hierarchical power as part of society – is widespread in China. In contrast, “low power distance,” which states that inequality in society should be minimized, is widespread in, for example, the United States and the United Kingdom.
In partly broken English, the document urged employees to take these differences into account when working with people abroad and “try to show our sincerity by changing our own habits and reconciling cultural values between us.”
Many are still unconvinced by such efforts. A new TikTok employee said, “There are jokes internally that if you stay longer than two years, you’ve stayed for life.”
Additional reporting by Ryan McMorrow in Beijing