TikTok is preparing to separate parts of its U.S. operations, and not all American employees will join the new entity. According to Business Insider Africa, Some U.S. staff were informed this week that they will not work for the joint venture, called TikTok USDS Joint Venture LLC, which is led by managing investors Oracle, Silver Lake, and MGX.
Instead, these employees will be assigned to a separate TikTok global entity that remains under ByteDance’s ownership, called TT Commerce & Global Services LLC.
According to a memo shared with affected employees, the change affects workers who focus on U.S. products that will stay tied to TikTok’s global operations after the sale closes.
In December, TikTok CEO Shou Chew told staff that these business lines include “certain commercial activities, including e-commerce, advertising, and marketing.”
Other U.S. employees, such as those working on data protection or algorithm security, will move to the USDS Joint Venture entity, Chew’s memo said.
Chew added that the deal is expected to close on January 22. TikTok and ByteDance did not respond to Business Insider’s request for comment regarding the staffing changes.
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If the deal is finalized, Oracle, MGX, and Silver Lake would each own 15% of the new U.S. joint venture. Affiliates of existing ByteDance investors would receive roughly 30%, 5% would go to an unnamed group of new investors, and ByteDance would retain just under 20% to meet U.S. ownership requirements under the divestment law that prompted the sale.
The law, called the Protecting Americans from Foreign Adversary Controlled Applications Act, requires companies based in countries that the U.S. considers foreign adversaries to divest from their American assets or face significant fines.
TikTok and ByteDance were specifically called out in the law. TikTok challenged the law in court but lost in a Supreme Court ruling last January.
Former President Donald Trump allowed the app to continue operating last year through executive orders while his administration worked with TikTok and potential buyers on a deal.
In September, the White House confirmed that a deal had been reached, with Vice President JD Vance stating that the TikTok U.S. operations would be valued at approximately $14 billion.
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Image Credit: The New York Times
