By Brenda Goh
SHANGHAI (Reuters) – China’s Alibaba Group announced on Sunday that Daniel Zhang will step down from its cloud business, after two months as the company’s group CEO and chairman to focus on its cloud division.
Zhang previously served in three roles concurrently, leading the team and the cloud intelligence division. The unit is China’s largest cloud provider and is to be spun off from Alibaba as part of the group’s restructuring.
The company announced the decision to leave the unit in an internal letter to employees seen by Reuters. Zhang was scheduled to hand over the group CEO role to Eddie Wu on Sunday, and the letter said Wu would take over the cloud operation after Zhang’s departure.
“Our company’s board expresses its deep appreciation for Mr. Zhang’s contributions to the Alibaba Group over the past 16 years,” Alibaba said in a statement, simply announcing that Wu will replace Zhang in his role in the cloud division.
The company did not immediately respond to Zhang’s request for comment.
The cloud business is a key part of China’s e-commerce restructuring, which was announced in March, splitting the company into six divisions, each with its own board and CEO.
Alibaba said in May that it aims to complete a public listing of its cloud unit within the next 12 months. On Sunday, the company said it will continue to execute a separate spin-off plan to appoint a management team.
Analysts have estimated the cloud unit to be worth between $41 billion and $60 billion, but said the data it controls could make it into domestic and foreign regulators.
“Daniel has expressed his desire to transition from the position of chairman and CEO of Cloud Intelligence Group,” the company said in a letter signed by Joseph Tsai, the founder of Libaba, who is slated to take over the chairmanship role from Zhang on Sunday.
“After careful consideration, Alibaba’s board respects and accepts Daniel’s decision and appoints Eddy as acting chairman and CEO of Cloud Intelligence Group.”
Zhang will “continue to contribute to Alibaba by transferring his knowledge in a unique way,” the letter added, adding that Alibaba will invest $1 billion in the technology fund Zhang will establish. The company also gave Zhang the title of “emeritus”, the first in its history.
“The funding supports Alibaba’s strategy of investing in future growth and continuing to grow our technology ecosystem.”
Zhang took over as head of Alibaba’s cloud division in December after it faced disruption in what he described as its “longest major failure” in more than a decade.
Zhang, a former accountant, joined Alibaba in 2007 and is best known as the architect behind the company’s annual flagship “Singles Day” shopping festival. In the year He was appointed CEO in 2015 and assumed the chairmanship in 2019, succeeding both roles from Alibaba founder Jack Ma.
His final years at the helm of the group came after two years of tumultuous management of the tech giant, making Alibaba the target of heightened regulatory scrutiny.
(Reporting by Brenda Goh; Editing by Hugh Lawson and Sharon Singleton)