Alibaba, the Chinese e-commerce behemoth, has announced the unexpected departure of former CEO Daniel Zhang, who was scheduled to take over a key subsidiary on Monday as the company undergoes a significant restructuring.
Hangzhou-based Alibaba is a leading Chinese technology company, with operations in cloud computing, e-commerce, logistics, media and entertainment, and artificial intelligence.
After years of turmoil in the Chinese IT sector, Alibaba announced in March the largest restructuring in its history, breaking itself into six organizations with the intention of listing them separately on the stock exchange.
On Monday, CEO Daniel Zhang was set to take over the firm’s new cloud computing business, which is now a separate entity.
But, two months after announcing his appointment, Alibaba announced that its now-former CEO was no longer with the firm.
“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 said in a statement to the Hong Kong Stock Exchange, where it is listed, late on Sunday.
It gave no reason for his departure.
Alibaba stated that plans for a spin-off cloud computing firm would proceed “under a separate management team to be appointed.”
In June, the company announced that Zhang would be succeeded as chairman by Joseph Tsai and CEO by Eddie Wu.
The CEO has been instrumental in the company’s development over the last decade, directing the now massively successful Singles’ Day shopping event since its inception in 2009.
The company’s stock dropped about 3.5 percent on Monday, the first working day of its new reorganization into six independent branches.
Alibaba’s reach extends beyond e-commerce and cloud computing to include everything from logistics to media, entertainment, and artificial intelligence.
However, its massive size caught the attention of Chinese officials as Beijing sought to crack down on the tech sector.
When authorities canceled what would have been one of the most lucrative public offerings in history — valued at $34 billion — for its erstwhile subsidiary Ant Group in 2020, Alibaba became the country’s first internet titan to endure the weight of heightened scrutiny.
Ant Group is the owner of Alipay, a popular mobile payment program in China.
Alibaba was probed for alleged anti-competitive acts and fined $2.8 billion one month after officials halted its IPO.
And in July authorities fined Ant Group nearly $1 billion for breaching banking regulations.